Much noise was made of Linden Lab's blog post about a month ago, describing how well the SL economy was doing. Especially when considering the worldwide economic downturn. This column is for those who wonder why LL is gloating while your business is not going all that well.
The first and smartest thing I could say is that no matter how the whole picture looks like, some people will be left out in any economic growth cycle. In the 1995-2001 period, the world economy grew importantly. Yet, poverty was not abolished because that never really happened.
Those of you who feel the frustration of being unable to profit from your SL businesses may wonder if the Lindens are lying when telling us that everything is just fine.
First of all, let's separate the land issue from all others. LL did well even when the SL economy was doing badly in 2007. They kept rolling out new continents and the land was snapped up quickly enough for them to increase revenue from tier payments. Only from October 2008 to March 2009 did they see land ownership go down... Given this situation, LL still has a much more important revenue flow from land than it did a couple of years ago.
With that said, the Lindens are still right to pretend that the economy is doing well. The overall state of the grid has made it possible for residents to be more present than ever, as we can see with figures that often reach 80 000 people online. Also, downtime has gone done seriously.
These most crucial numbers give credibility to the "it's going well" theory:
- The value of transactions reached a record of US$120 million in the first quarter of 2009;
- In a survey, 61% of residents said they were either very or somewhat optimistic;
- 68% of residents are either increasing or maintaining their investment in SL business.
So, what's the problem if your business is not doing well? I hate to do this, but I bet that many of you control your own fate. I recently talked to a guy who got back into SL business this year after a year of hiatus. He noticed that competition is fierce nowadays, while it was not before.
This means that strategic mistakes will not be forgiven by the market. When I visit stores in SL, I often find big flaws, from product quality to traffic targeting, that can be optimized. The people who cannot even get shoppers to visit should wonder what they are not doing well.
If you make clothing, you have to find your niche despite the presence of powerhouses such as Armidi, Curious Kitties, Ivalde, Truth, Mischief Fashions and Nicky Ree. This is no easy task, and any mistake will cost you traffic and sales.
Did you come up with a hit? Then, expect your competition to look at what you do and find a way to make a competing product.
In services, rivals will make a pitch to try convincing your customers that they can do better. I've done it, I've seen it people try it. You may not have seen that a couple of years ago.
I can compare this situation to journalism. In the field, we say that the truth is out there. You have to go get it. The growth of the SL economy is there. And you have to go get it... while expecting rivals to make an effort of their own.
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