Interview with Linden Lab CEO Mark Kingdon

Earlier this month, The Industry Standard interviewed Linden Lab CEO Mark Kingdon at the company's offices in San Francisco. Linden Lab is the parent company of Second Life, which in recent years has enjoyed a huge surge in popularity -- as well as a backlash over technical problems, changes to in-world regulations, and an earlier period of media hype. In the interview, Kingdon addressed these issues and also discussed Second Life's enterprise push, efforts to improve the Second Life experience, and Linden Lab's strategic goals for 2009. (Related: Linden Lab executives plot Second Life growth, but interface concerns persist).

Industry Standard: The first question I'd like to ask is: If you were going to give a brief state of Second Life talk right now, what would be the main points that you would highlight?

Mark Kingdon: The first point that I would highlight is that all companies go through various stages of growth. There have been a lot of programs written and a lot of research done on companies in innovative categories and their growth trajectory.

I think we've followed a pretty standard path. We've had an incredible hype phase where the world discovered the power of virtual worlds in Second Life and then just as there was a huge amount of energy put into exploring the potential, there was a huge amount of energy put into exploring the pitfalls and downsides of virtual world space.

I think the virtual world category, and our company in specific, has moved out of that kind of anti hype phase and we're now in a much more comfortable place where I think the world has gotten its head around the fact that virtual worlds are here to stay. There is a very compelling set of activities that virtual worlds are incredibly powerful for. They erase geographies, they allow for a type of interaction that you can't get in the real world and they bring with them really interesting economic and business opportunities for users.

So that's really where, I think, the outside world is in terms of its view of Linden Lab and Second Life, and the virtual world space.

As a company, I would say we've probably followed kind of the same trajectory, which is that we had a period where there was just incredible energy in the virtual world space. We benefited tremendously from that and our growth showed it.

Then we went through a phase where people were questioning the virtual world space and our growth probably showed that as well because it slowed. Now we're at a point where we're growing our active user base were the in world economy continues to grow at a very rapid clip, where usage hours continue to grow, where down time has diminished.

So, on all of those metrics, we're making really, really great progress as a company. It's more, I guess I would say more comfortable, normal progress that you would expect of a company of our maturity level. So, we're in a really good place as a company because things have evened out in the industry. Our company is very thoughtfully proceeding on the things that it needs to do to grow and be a dominant platform in space. Those things, I can talk about a little bit about.

Industry Standard: Well, let me go back to a couple of things you just mentioned. You said "compelling activities." What are those compelling activities?

Kingdon: They are very wide-ranging, which is a blessing because it means that Second Life can mean many things to many different people, but can be a challenge when you're trying to communicate the specific attributes of Second Life.

Compelling activities, if you're looking on the consumer side of things like: blog music, creating your virtual identity, joining in world communities around a passion of yours, learning -- education and learning are really powerful. Imagine taking a language class in Second Life, a great language, there's probably several, in fact -- connecting with like minded people in different places, creating rich content, whether it's art or merchandise you sell, that's kind of on the consumer side.

On the business and education side it's very much about learning, it's about in world training, it's about collaboration. It's also very much about changing work processes inside of a company, a company or an organization. Depending on who you are and what your interest is, there are many, many different paths that you can take through Second Life.

The way the company is internalizing that, is we're trying to find a wider variety of entry points that we then build into experiences for users.

So rather than treating all users in precisely the same way or offering them precisely the same experience with no differentiation or no tailoring, we're in fact, trying to do the opposite. Yes, we want to keep Second Life open ended and exciting, but if someone's coming because they have a specific interest in blogging music and they want to create an avatar that reflects their identity and go out and listen to music on Saturday night, what we ultimately want to do is stream together an entire experience for them. They can do anything they'd like, but we'd like to create those experience elements for them, connect them together in a way that's not generic, but specific and tailored.

So the first step in that is if you go to the website now, instead of it just being you're world, your imagination with no specificity, the first page is: do you want to play, do you want to learn, do you want to explore? What are the things you're interested in doing?

Industry Standard: This in terms of the sign up phase?

Kingdon: Yes. That's the first step. There are probably another 100 steps we need to take, but you can start to see, or start to imagine how we might be reshaping the Second Life experience based on what you're seeing on the home page today.

Industry Standard: You also mentioned metrics before that you keep an eye on. If you were to identify the two most important metrics that you look at, what would they be and how have they changed in the past six months or so?

Kingdon: Right. Well, the amazing thing about Linden Lab is that it's a very well-metered company. We all have access to the same dashboard which has more than 100, probably less than 200 different metrics that you can look at. I have to count; I should count, that way I can let you know what that number is. It's a lot.

Different people follow different metrics and so you can look at the playlists of other people and see what metrics they follow on our internal dashboard, which is kind of a cool thing.

I look at pretty much all of the metrics several times a week because it's very easy to do so. All of the figures are in chart form so it's very visual and you can see trends very, very quickly. The ones that I look at most frequently are: hours lost to outages. So if we have downtime, how many hours were lost? And that's a very interesting statistic when you look at 2008, because in the second half of the year the hours lost to outages were probably about half of what they were in the first half of the year.

So as a company, we're making a lot of progress in minimizing disruption to the user experience.
The other things that I look at are monthly active users. I look at that daily, I look at that weekly, but when it rolls up monthly you begin to see tends. Active monthly users are people who have been in world more than one hour. That's a statistic that we're seeing nice growth in and it's really important.

We've seen a nice uptake, particularly in the fourth quarter there. And, it's due to a bunch of different things that we've been doing to optimize Web traffic and to optimize the reg flow.
And, because we had some publicity in the fourth quarter that generated a lot of interest in Second Life.

Industry Standard: When you say reg flow, you mean the registration process?

Kingdon: Yes.

Industry Standard: How do you optimize that?