August 19, 2006 10:40 PM PDT

Business consulting comes to 'Second Life'

SAN FRANCISCO--If one thing has become clear about the virtual world "Second Life," it's that it is providing lucrative business opportunities to a large, and growing, number of entrepreneurs.

And while these innovators--creators of burgeoning digital clothing, construction and land empires--begin to flourish, many are finding that the practicalities of running a business, even in a virtual world, are complex and demanding.

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Video: 'Second Life' moves to real life
Community gathers for its second annual convention.

But now a woman with a long established and successful accounting and business consulting firm is bringing her team's skills and expertise to "Second Life." And she's hoping she can make a splash as the first to provide this era of digital industrialists with the kind of financial advice that can help them become successes themselves.

Arlene Ciroula, the chief operating officer of the 100-person Baltimore accounting firm KAWG&F, said she wants to help the people who are breaking new ground with their "Second Life" enterprises, many of whom have never run businesses before. And that's why she spent the weekend here at the Second Life Community Convention, a gathering of several hundred "residents" of the virtual world, talking to as many people as she could and trying to drum up interest in her new initiative.

Ciroula said for the time being, at least, she would take Lindendollars, the in-world currency of "Second Life," as payment for services rendered.

"The idea is that as I began to learn more about 'Second Life' and saw how the business community had established itself, it will undoubtedly just continue to grow, and the community is unserved," Ciroula said. "No one is serving this community with accounting, business consulting, strategic planning or budget forecasting services."

While it may seem odd that players of a virtual world would need business advice, "Second Life" is clearly one where it may well be valuable. The open-ended digital environment, in which anyone can create nearly anything they can imagine, look like nearly anything they want and build just about any kind of business, has proven since its 2003 launch to be fertile ground for many innovative thinkers.

Thus, there is a small but growing number of people who have found it possible to make their entire livings with their "Second Life" businesses, be they employees of companies like Electric Sheep, which builds complex in-world projects for clients like Major League Baseball, Lego, Dartmouth College and many others, or Anshe Chung, a developer who famously makes six figures developing and selling "Second Life" land.

"From my research, there are around 3,100 businesses in 'Second Life' right now," said Ciroula, who goes by the in-world name "Chili Carson." "There are currently 300,000 to 400,000 users. So do the math. I would expect it to grow along with the population."

Managing moeny and cash flow
Ciroula said she believes there are many similarities between advising a business in real life and in "Second Life."

Those include the need for marketing and brand-building, and the necessity for establishing a good reputation. Further, businesses of all kinds need to learn how to manage money and cash flow.

"There's the classic, 'I'm small, how do I get over certain humps, so I can get bigger?'" Ciroula said. "'How do I know when it's time to hire someone?'"

At the same time, though, "Second Life" businesses present a set of unique challenges.

"You're dealing with a country that's forming and an economy that's forming," she said, adding that she had recently heard one in-world businesswoman talking about the difficulties of keeping her outfit running. "She never dreamed of going to work in a 'country' where every Wednesday (when 'Second Life' publisher Linden Lab shuts the virtual world down for maintenance) a hurricane was going to come and wipe her out. So it's a shifting environment that's still getting its feet."

To some in the "Second Life" community, Ciroula's idea is a good one.

"'Second Life' is full of small businesses with people who are new to small business," said Giff Constable, vice president of business development for Electric Sheep, who added he wanted to see more details of Ciroula's plan. "And there's no infrastructure in place to help them."

Constable also said giving in-world businesspeople a way to work through some of their practical business issues will have a ripple effect across the entire "Second Life" financial system.

"To see an accounting firm come in, it's going to help the community and the economy tremendously," he said. "It's solving bottlenecks we have in the economy."

For his part, Linden Lab CEO Philip Rosedale also lauded Ciroula's idea and said she was likely onto something big.

"I think it's great," Rosedale said. "It's such a rich field (for) an accountant. There're no competitors."

Rosedale did add that anyone trying to set up a business like Ciroula's would have to deal with the inevitable problems that arise in an unfamiliar business environment.

He said, for example, that Ciroula's firm would likely have to spend a significant amount of time working on dispute resolution and arbitration as its clients work through problems for which there are no known solutions.

And that's because "Second Life" has few, if any, rules governing business. And Linden Lab has pretty much no oversight over what goes on between parties in a transaction.

Meanwhile, as a result of this lack of rules and lack of understanding among "Second Life" businesspeople over what is acceptable behavior, Ciroula is also planning on creating a "Second Life" chamber of commerce.

The idea, she explained, is to provide a "dialogue" for businesses, as well as a member directory. Then, she added, customers could know they were doing business with certified companies, and businesses could learn some best practices to follow as they try to grow.

For Constable, that seems like a good start, and one he wants to keep an eye on.

"It is great in concept," Constable said. "So I'm really excited to see what they pull off, and (we'll) potentially be a part of it."

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9 comments

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Wish we had something like this in Eve
Then again, we'd probably end up podding the arbitors before the arbitration was even half-way finished.

Artillery bring a whole new dimension to dispute resolution.
Posted by H Voyager (38 comments )
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Oldtimer and loving it
About 10 or so years ago I began playing Ultima Online. During my 4 years in the wonderful world of UO, I was lucky enough to fall in with a group of people that were working hard to make their City-Run town of Oasis (Sonoma Server). It wasn't long before my offers of help were met with a plethera of projects and ideas that I was allowed to either run with totally or become a team player. Oasis was most well known for their Sunday Afternoon/Evening "Fight Night" events, during the peak of it's popularity would see upwards of 150 people attending; either to watch or to participate. During this time we were flooded with many different individuals and groups that, out of jealousy I imagine, would attend the event only to cause disruptions. During this time, we began speaking with the "Gods" of UO and termed the phrase that everyone uses now, "griefers". During this time that we were in touch with the "Gods" I began telling them and whomever else would listen about the perfect world that OSI/EA should develop. A world that would merely be a blank slate so the people in the world would be able to create everything, from homes, towns, even animals. They should also be allowed to create their own rules for the Cities they construct, and should also be given the same development tools the "Gods" were using, so the players could construct all of this.

After my tenure at UO, I went to Asheron's Call, and while this was just another "level up" game, I found the community there to be helpful. Of course, I continued my "proselytizing" to anyone who would listen about the "perfect world" I dreamed of.

During my time in AC, I was asked by the "Gods" there to help with the testing of AC2. I was excited about this opportunity, as I had heard that AC2 was going to be a step in the direction of the world I'd dreamt of; unfortunately we all know now that wasn't exactly true. But, during this time, I received an invitation to Beta Test a game I had never heard of, "Second Life".

Feeling a bit down-heearted because of the AC2 disappointment, I decided to give "Second Life" a try, who knows, perhaps it would at least entertain me. That was 3 1/2 years ago, and from my very first day, I knew that this WAS the world I had wanted for so long.

Not only in Second Life are you able to create your own content, but because of the "hands-off" approach of Linden Labs, the community seems to have either garnered an older group of players, or perhaps everyone acts more "mature" because they are being treated with respect by the developers, who allow the Residents of the world, to decide how and where that world is going.

When I first entered into Second Life, you could fly from one edge of the world in a straight line to the other edge, within a half-hour. Today, I doubt you could do that in any less then 6 hours. While there is content in Second Life that is sexual explicit or filled wtih Casinos, there is much much more content that Residents have developed that really astound everyone within the community. For instance, there is a NASCAR Race Track, with NASCAR Race Cars in Second Life (Silver Motorsports), there is also an area where you can Skydive (Abbott's Field), and many clubs where LIVE musicians entertain those who are taking their dates, wives, or friends out for a good time, and during that time, you can even dance with your partner. There is even a reproduction of parts of Los Angeles in Second Life, with there own Police Force.

When I started in Second Life, people like me were working hard to learn how to use these tools to create all of this content we see today, and just a small sampling that I have talked about. While there are always going to be "griefers", even in Second Life, I have to say the Community of Second Life is by FAR the greatest Community that I've ever had the pleasure of dealing with in any and all the Virtual worlds.

I would strongly suggest that if you would like to belong to a world, where you can create what you dream, that you take a look at Second Life, and don't be afraid of asking for help. You will find the Second Life Residents are the most helpful to the honest New Residents that are trying to learn the tools as well.

Second Life is the new genre of Virtual Worlds, and I'm willing to bet that within 3 more years, we will see other large commercial endeavors like Second Life being introduced to the community of Online World players.
Posted by bsadlerjr (1 comment )
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Second Life Has Now Become Just Like Life
Second life is just a bunch of rubbish. It seems life every power that is want to turn the virtual world into a pot of gold. You know people go into the virtual world to escape this piece of crap world that you money grabbing ***** have created.

You have already ruined this world how about you leave our virtual world alone.
Posted by sabot96 (24 comments )
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Games and Money
Some games are more driven to monetary ends than others. Most MMORPGs have some "market" aspect to them now and if there is a way to exploit it via the real world to make cash they will.

You can play games that try to avoid this happening, but if those games are wildly succesful like WoW you'll see it everywhere anyway.

Bottom line: Until you stop living in the real world don't expect that people leveraging to make a buck will be going away any time soon.
Posted by Fireweaver (105 comments )
Link Flag
Why Second Life?
Second LIfe has long been a CNet darling and I can't figure out why.
Many, if not all of the aspects encountered in Second Life exist in other MMORPGs, often to a greater degree. Why does CNet **LOVE** writing articles about Second Life? Do they have a better relationship with the games creator so they have easier access?

Maybe they get virtual money for every article they write- that'd be legal "payola" since it technically has no value, right?

Should we be questioning CNet's motives?

You'd think that with it's legions that WoW would make more sense to write about. Each article would automatically draw 10x the interest from players.
Posted by Fireweaver (105 comments )
Reply Link Flag
Vaguely disturbing virtual hippies
While I understand the enthusiasm people have for creating a world where you can do and be anything, there's something vaguely disturbing about the Second Life phenomenon that I can't quite put my finger on.


As pure entertainment, I've got no problem with it. I think what bothers me are all the intelligent and creative people investing so much time and effort and viewing it as some kind of utopia. A virtual environment like SL has real potential, but as long as it's a commercial effort with a "business partners" link on the home page, it'll end up being dominated by commercial interests (sorry, all you idealists).


Incidentally...for some reason, all the hype surrounding Second Life reminds me of something I saw on South Park. In an episode where hippies took over the town for a Woodstock-like music festival, a doped-up hippie made a lame comment
about how everyone spontaneously organized themselves to provide food, clothing, medical services, etc, and how "amazing" it was to be part of it. One of the kids simply said: "...yeah, it's called a city..." Now, I'm not equating SL users with doped-up hippies, I'm just making the observation that it's natural for large communities of people to organize themselves in predictable ways. Let's not make this out to be more significant that it actually is.
Posted by Paul Schantz (11 comments )
Reply Link Flag
I know the cure
Hippies hate slayer.
Posted by jabbotts (492 comments )
Link Flag
JUST FOR ONCE!
"Should we be questioning CNet's motives?"; as this article in part states: "But now a woman with a long established and successful accounting and business consulting firm is bringing her team's skills and expertise to "Second Life." And she's hoping she can make a splash as the first to provide this era of digital industrialists with the kind of financial advice that can help them become successes themselves." Is this another ENRON like "Second Life" gimmick now that the founder of ENRON has been reported to have died a few weeks ago (perhaps his ghost is at work). Reading into this article... it has all the trademarks of the Arthur Andersons (long established and successful accounting and business consulting) HUH! Just what is CNET News up to... have they run out of factual news-worthy stories about things financial and economic around the world or what!
Posted by Captain_Spock (894 comments )
Reply Link Flag
I agree
CNET run a lot of Second Life stories. I think they are being paid in some way.
Posted by Andrew J Glina (1673 comments )
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