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Tuesday, November 8, 2011

Moneybox: Why Second Life Failed

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Moneybox
Why Second Life Failed
How Clay Christensen's "milkshake test" predicts which ultra-hyped technology will succeed, and which will bomb.
By Dan and Chip Heath
Posted Tuesday, Nov 08, 2011, at 03:05 PM ET

Below is an excerpt from The Myth of the Garage and Other Minor Surprises, a new book by Dan and Chip Heath that launches today. You can get the book free on Amazon or B&N.

You—sitting right there, reading this article—you're an avatar in Second Life. You work a Second Life job, earning Linden dollars. You have blue hair and a serpentine tail, and you're dating an androgynous digital skateboarder named Rikki. Also, you are a ninja. Life is great.

At least, that's the way things were supposed to unfold. In 2006, the future was Second Life. Business Week put Second Life on the cover. American Apparel, Dell, and Reebok, among many others, rushed to build virtual storefronts. Reuters even created a full-time Second Life bureau chief. People rushed to sign up and create their own avatars. Blue hair and Linden dollars were the future.

Looking back, the future didn't last long. By the end of 2007, Second Life was already losing its fizz. "Businesses are shuttering in Second Life, it seems, because no one is using them," wrote Morgan Clendaniel in a brutal piece in GOOD magazine. "There were never any employees at stores like Dell and Reebok when I visited, nor were there any customers. But that wasn't that shocking because, for the most part, there seems to be no one in Second Life at all."

Today, Second Life limps along. In the first half of 2011, the company reported ...

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