how to cash in on second life
How do you make big bucks in the virtual world? The author of a new entrepreneur’s guide to Second Life talks us through the key sectors
words by Daniel Terdiman
Ailin Graef used to be an anonymous schoolteacher. But as Anshe Chung, her Second Life identity, she has built a real-estate empire worth more than a million US dollars and made the cover of Business Week magazine.
Although Chung is the single most successful Second Life entrepreneur, she’s not the only one making money there. Thousands of people all over the world – with strong concentrations of users in northern Europe – make a full-time living with fashion, land, construction, toy and gadget and adult businesses that exist entirely in Second Life.
Second Life is an open-ended 3D social virtual world where residents can be and do what they want, and pursue a wide range of entrepreneurial ventures, most with little financial investment.
The sophisticated economy of Second Life revolves around its in-world currency, the Linden dollar, which is directly transferable to US dollars (at around L$270 to US$1), and the fact that residents choose to dress in outlandish ways, drive around in crazy vehicles, live in beautiful castles or futuristic towers and even own entire islands.
All of that is possible in Second Life, and that’s why a burgeoning free market economy has blossomed there, with users trading more than US$1.2m there every day.
making it in… fashion
For many Second Life users, one of the best things about the virtual world is the ability to dress in whatever outfits they desire and to change their look as often as they choose. That’s why people like Hyasynth Tiramisu are the real celebrities – in a world where nearly anything is possible, the top content creators are the stars. Hyasynth is famous because her Silent Sparrow designs are known for quality and attention to detail. Where most fashion designers use existing textures as the main design elements of their clothing, Hyasynth creates everything from scratch. That means her clothes look more authentic – and why they’re in high demand.
The fashion business is a microcosm of the entire Second Life economy. Entrepreneurs make money by finding a niche (a special shirt, hand-drawn outfits like Hyasynth’s, or even all-new avatars), opening a store and selling those products, continually coming up with innovative items, providing good customer service and making sure to stay ahead of the market. Fashion items in Second Life, like most other products, sell for very small amounts of real-world money (about a quarter of a US dollar for a typical item) so, to be financially successful, you have to be able to sell a lot of product. And that means ensuring your designs are strong, new and creative and you do everything you can do to keep your customers happy. Second Life is a word-of-mouth system: do well, and people will sing your praises – but the opposite is equally true.
Do make friends with other fashion designers. It’s important to have a support network.Other designers will teach you much more than any book or website.
Don’t sell your product before it’s the best. People remember quality and you want them to remember that yours is the best.
making it in… real estate
Anshe Chung became a millionaire through her mastery of the Second Life real estate business. And why not? People need a place to hang out with others, to set up stores, to build their dream homes and much more. So Anshe found a way to buy a great deal of land at low prices, then turn it into endless parcels and sell them at a tremendous profit.
Land in Second Life is not for the faint hearted. It is the one segment of the economy that requires substantial capital investment, since a single island costs US$1,675 up front and US$295 a month, and you wouldn’t start a new land business with less than 10 islands.
But for those, like Anshe, who have the initial investment and a year or so to spend buying islands and developing them into managed, landscaped parcels to sell to Second Life users, there is plenty of opportunity. And that’s where the money is: not in land speculation, which some people try, but in developing bare land, making it comfortable and livable, inviting and private. Those who do best at it can make a lot of money.
Do look for niche markets – such as catering to Second Life sub-communitieslike furries, elves or vampires – where you can charge premium fees and establish yourself more easily.
Don’t try to compete on price alone, because there is always one guy who will do it even cheaper.
making it in… construction
The total land mass in Second Life is estimated as roughly that of Tokyo, Japan, and there are countless buildings, castles, towers, domes and other structures covering that land. While many of those structures were made by users for themselves, many more were bought by users looking for a place to call home.
That’s the basis of the Second Life construction business: making prefabricated and custom structures and selling them. There are almost no limits to the kinds of buildings users will buy, but the people making money are the ones who specialise in one area and who focus on making a quality product.
Customers are looking for what’s new and what’s attractive, and in order to provide that, builders need to watch what else is for sale and concentrate on making sure their work looks great and innovative. Pre-fabs are buildings that uses can buy from a store, while custom work is done on commission. Either way can be lucrative, but be sure to focus on what you do best.
Do get the spatial arrangements right. Doors and ceilings need to be higher than in real life because users see from above and behind their avatars.
Don’t put furnishings right next to walls because the camera view jumps through walls.
Daniel Terdiman is author of The Entrepreneur’s Guide to Second Life, available from www.amazon.com
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