Guide to Doing Business in Second Life

Second Life is supposed to be an interactive Internet game, but in the 24-hour period of this writing, players spent over $1,750,000 dollars within the Second Life economy. Second Life is a global phenomenon, and it has been covered avidly by publications like The Wall Street Journal, BusinessWeek and the New York Times. San Francisco's Linden Labs is the game's creator, and "the Lindens" are the supreme rulers and overseers of Second Life.

In case you have been living under a rock, Second Life "residents" create avatars that represent themselves and move about a virtual world visiting resort areas, making friends, shopping, playing sports, setting up house and sometimes even getting married. The economy is real and so are the profits. Residents buy and sell virtual land, open stores, work in nightclubs, gamble, form business partnerships and start entrepreneurial ventures.

Here, people speak of virtual land baron Anshe Chung in hushed tones of reverence or disdain, and gossip about how she just made her first $1 million, cold, hard, U.S. currency in Second Life land deals. This is a place where women pine for pricey ($4) Nonna Hedges haute couture gowns, men gift their girlfriends with jewelry, and money is made and lost. More than a few residents have quit their real life jobs to work exclusively in Second Life businesses, and successful real life companies such as Reebok, Dell Computer and Telus, a Canadian telecommunications company, have set up shop for the primary reason of raising visibility among the 2.5 million Second Life "residents".

How do people make money in Second Life? The possibilities are almost as endless as real life, but following are some of the primary avenues.

Action Steps
The best contacts and resources to help you get it done

How Avatars Strike it Rich

1) Land: The big money is in land - buying and selling, renting and developing. 2) Retail: Once you rent or buy store space you can set up vending displays where people can shop while you sleep. 3) Manufacturing: Good builders can always make money by building and selling houses, jewelry, weapons furniture, shoes, and so on. 4) Scripting: Good scripters are as in demand as builders. Examples of scripted items are doors that open and TV sets that work. 5) Fashion: Second Life fashionistas are deadly serious about their style. Don't expect to make a fortune, but a number of clothing and hair designers make their primary real life incomes in Second Life. 6) The sex industry: Those new to Second Life sometimes start out as strippers or escorts. (Yes, there are animations for these activities.) In this capacity, you may be able to earn the capital to start more lucrative and respectable ventures. New nightclubs and strip clubs open and close, but the best turn profits.

I recommend: The Second Life web site is the obvious place to find information, and it is surprising how many people bypass it. The other best place to learn about Second Life is simply spending time in Second Life itself.

Build it, Script it, Sell it

Building items people use and scripting animations takes a bit of time investment in the learning and the doing, but even building simple things can create a cash flow while you hone your skills.

I recommend: Access developer resources and find out about the Second Life Developer Program, which provides you with a web listing so those seeking assistance in creating builds or scripts can find you. Also see the TUI (Technical User Interfacing) web site.  Once you are in SL, do a search for the groups Academy of Second Learning and TUI. Join these groups and they will send you announcements about classes. Also search in "Events" under the "Education" category to find classes that will help you build your marketable skill sets.

Dress the Second Life Elite

Fashion is a force in Second Life. The game creators enable ways to easily create very simple clothing, but for the kinds of fashions that will have avatars storming your store in droves, you will need Photoshop skills, building skills and even some scripting skills.

I recommend: It's not enough just to know how to wield a Photoshop wand and build. Second Life fashion is very competitive, and you must know what's hot and what's not. Before you think about jumping into fashion design or mingling with the Second Life jet set, visit Second Style,  the Vogue of SL and SLATENight (SL Arts and Total Entertainment). Fashion Planet syndicates many of the Second Life fashion blogs. Also take a look at Second Life Shameless Gossip, which covers fashion, but also puts it into context of how it's worn in Second Life. At the fashion section of the Second Life web site, you will find not only fashion blogs, but guides and templates that will set you on your way to becoming a Second Life fashion designer.

Be a Virtual Donald Trump

The real money in Second Life is in land, even if it is composed of pixels. You can make a fortune or lose your shirt in real life money, depending upon whether you are savvy or naïve. If you do not buy directly from the Lindens, beware. When buying from private residents you are usually just renting the land, though they may call it "buying". If they leave Second Life or decide to evict you, you will lose your land without recourse. Often, you are not permitted to resell this kind of land.

I recommend: Land is not cheap, so before investing, read all about it on the land section of the Second Life web site. One way to buy land is directly from the Lindens at auction. No matter how you buy land, once you buy more than a very small parcel, there is a monthly fee, so if you plan to resell it, do it fast. Want your own private island, maybe to set up a resort and nightclub complex? You can order one from the Lindens as land becomes available for $1,675 for 65,536 square meters (about 16 acres). Monthly land fees for maintenance are $295.

Promote Your Real Life Business

Many real life companies are entering Second Life as a way to raise their visibility and drive real life sales. Some companies open storefronts and use them not just to promote their real-life businesses, but also as an extremely cost-effective way to test out new designs and concepts before launching them in the real world. Other companies hold events, parties and conferences targeted at either Second Life residents or those they bring online themselves specifically for the event. The visuals of Second Life make the experience much more real than a webinar, and virtual conference facilities are used for everything from classes to global sales seminars.

I recommend: See the business section of the Second Life web site as a starting point. Consider hiring a Second Life business and marketing consultant, someone who makes it a business to help real companies set up a viable presence in Second Life and meet their specific business and marketing goals. Like any foreign country, it takes awhile to learn one's way around Second Life and companies who just send in one of their marketing managers for a week or a day are likely to be disappointed with the results.

Tips & Tactics
Helpful advice for making the most of this Guide

• Relax. Wander around Second Life for a few weeks, meet some people, make some contacts, get a feel and decide what interests you. Some of the worst stores in Second Life were created by large, successful, real life companies who have not taken the time to understand the conventions of this virtual world.
• Do your homework. Like real life, the most successful entrepreneurs look for a need then fill it - or find a way to create the need.
• Be clear about your purpose. Is it to make money, have fun or create increased awareness for your real life business?
• Create a solid business plan and marketing plan. Basic business tenets apply here as they do in real life; targeted marketing and strong branding are the cornerstones in launching and maintaining a successful business.