Despite a silver-tongued PR team capable of spinning any irrelevant Second Life happening into a New York Times story, former Linden Lab CEO Philip Rosedale couldn't save himself from the downside of the virtual hype cycle. His "life's work" has become a punchline. Here are the five mistakes that added up to cost Rosedale his job.
- The big empty. Linden Lab makes money from land sales, a business model which all but guaranteed vast tracts without users. That, in turn, worked against Rosedale's dreams of attracting advertisers. Far too late, he realized that Second Life needed a search feature, so users could migrate to popular spots, where advertisers could target them. Most people logged off bored. As it is, only 600,000 of 13 million registered users visit regularly.
- Refusal to fix what's broken. Second Life doesn't work well. Nothing about the experience is intuitive nor "fun." Instead of addressing obvious bugs, Rosedale evangelized Second Life as a grid-computing platform.
- Calling in the Feds. Gambling was tolerated in Second Life — until Rosedale brought on a government crackdown. He invited the FBI to tour the world on multiple occasions in some misguided effort to prove his virtual world was clean=cut. The result? Stings which banished the second-most popular activity after sex.
- Publicizing misleading stats. Rosedale always had impressive numbers at the ready. 830 residents earn $1,000 a month? Most reporters ate it up, forgetting that Rosedale was saying only 1 in 1,000 residents manage to earn a five-figure annual income from his world.
- Regulation. After a few bank runs and underage orgies, Rosedale backed away from his anti-regulation stance. Second Life banks now need real-world charters and users must give up anonymity so Linden Lab can police Second Life's sex parlors. The rules are draining what little fun there was.
Philip, we'll miss you.