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Features May 2007: Volume 4, Number 2

Age of Avatars
by Rosedale, Revelle ’92

"Philip Rosedale, Revelle '92, has created an online world where your avatar can socialize, create art and music, buy and sell, protest, dance, campaign for office, practice religion, make money, blow up things, have sex, die and get resurrected. "


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Second Life

Linden Lab

Real Networks


The Making of Second Life

Photograph by Linden Labs

For someone who spent his childhood building projects from kits ordered from the back of Popular Mechanics magazine, the idea was deeply compelling: If one could simulate the laws of physics inside a computer, couldn’t one quit screwing around with all the wood and metal and just build things digitally?

That thought, which first struck Philip Rosedale as a teenager in San Diego in the ’80s, is in part the impetus behind Second Life, the 3D virtual world created—or, more accurately, enabled—by Rosedale’s company, Linden Lab. Now in its seventh year online, Second Life has evolved into many things beyond a platform for virtual invention. And if it continues to progress as Rosedale and his investors predict, someday it—or some version of it—will be an interface we all use when online. “I believe we are moving into a time in which spending part of a day in a virtual world, whether it’s for work or pleasure, will be as natural as sending an e-mail or using a Web site, both of which were, at their onset, regarded as very peculiar undertakings by normal people,” says Mitch Kapor, the founder of Lotus and the first outside investor in Second Life.

Unlike other virtual 3D worlds, there is no plot, no goal, no game at the heart of the Second Life experience. Users, or “Residents,” as they are known, select a humanoid avatar—some pick their real-world gender and race, some don’t—and name it. Later they can embellish it with user-created accessories such as designer clothes or tails or fur or wings they can buy with Linden dollars ($1 U.S. = $260 Linden dollars) at select in-world outlets. Once they master a few keyboard commands, they can meet other avatars and explore a realm of shopping malls, nightclubs, classrooms, beaches and surreal landscapes. Using tools provided by Linden Lab, they can build things from virtual building blocks known as primitives, or prims. About 90 percent of the content in Second Life—from designer
T-shirts to tango dance moves—is created by some of the nearly 1 million residents from around the globe who log in every month.

What happens in Second Life? Just about everything that happens in real life, and a lot of things that don’t. Resi­dents socialize, create art and music, buy and sell things, protest, dance, campaign for office, practice religion, make money, blow up things, have sex, die and get resurrected. Harvard Law school, one of hundreds of academic institutions with a presence in Second Life, brought the avatars of geographically dispersed students together in-world and conducted a class called CyberOne: Law in the Court of Public Opinon as a way of exploring argument and discussion on the internet. IBM and other corporate giants have held business meetings, conducted training, built product prototypes and gathered customer feedback in Second Life. Enter­tainers such as Jay-Z and Ben Folds have held concerts. Less celebrated individuals have invented ways to morph from humanoid to hamster and to dance with tornados. “Every day something strange and new is going on in Second Life,” says Rosedale.

The man who created this high-tech rabbit hole grew up mostly in the San Diego area, the precociously inventive oldest child of a Navy-fighter pilot dad and an English-teacher mom. Rosedale built his first analog computer from a kit for fourth-grade show-and-tell, and a few years later, he reconfigured the door to his bedroom to fly up out of sight at the touch of a button, à la Star Trek. He started programming digital computers in middle school and by late high school had started a business selling, installing and servicing the automation software he had created for car dealerships and architects. That business, soberly named Automated Management Systems, put him through UCSD, where he graduated with a B.S. in physics.

“In high school I was one of those creative, smart kids who didn’t try very hard, so when I got to college it was an eye-opener,” he says. “I remember taking an honors physics sequence, and it was one of the most depressing experiences I had ever had. I thought I was so smart, yet those classes absolutely punished me.”

Nonetheless, Rosedale stood out among undergrads, and not just for the 1972 white Cadillac El Dorado convertible he drove around campus. In Rosedale’s final year Professor Wayne Vernon asked him to be the TA for his experimental physics class, where students invented things and tried to get them to work in 10 weeks. “It’s always hard to get the kind of people you need for that course, but Philip was ideal for it,” recalls Vernon. “He had curiosity and native talent and he could make things work very quickly. More than that, he was bubbling over with enthusiasm, and he was able to transmit that enthusiasm to the other students. He was a lot of fun to work with.”

After graduating, Rosedale headed north to San Francisco, where he and Gary Greenbaum, Ph.D. ’95, a physics student he met at UCSD, created an Internet streaming media (media consumed as it’s delivered) application called Free Vue that was purchased in 1996 by Seattle-based RealNetworks. After he moved to Real, Rosedale graduated through the ranks to CTO, but even as he did he continued to harbor a long-cherished idea about creating a virtual world where he and others could build things. “I was struck by this idea that you should be able to connect thousands of computers together, and collectively those computers could create a sort of Tabula Rasa,” he says. “People will be able to go in there together and just make stuff. That’s got to be a good idea—not only a neat thing, but good business.”

In 1999, Rosedale’s bank account was fat enough and the available graphics
technology and broadband Internet speed were almost good enough for him to try to make hay on his idea. He left Real­Networks, moved back to San Francisco and set up shop in a converted warehouse on tiny Linden Street, near Hayes Valley.
In the grand tradition of high-tech crucibles, the space was bare-bones. “It was unheated, uncooled, and it had a really small, bad bathroom,” recalls Andrew Meadows, Revelle ’93, another UCSD physics friend who would become Linden Lab’s first employee, and still works at the company as a senior developer.

Hooking investors wasn’t easy. “Every­one thought the idea was nuts,” says Rosedale. Everyone, that is, but Kapor. The two had met a few years ­earlier when Kapor was a partner at ACCEL venture capital and Rosedale was an entrepreneur-in-residence. “What sold me on investing was Philip, because I have learned the entrepreneur is even more important than the idea, though I liked the idea,” says Kapor, who was later joined on the Second Life investor roster by Pierre Omidyar of eBay and Jeff Bezos of Amazon. “When you see someone who looks like they have a combination of technical insight and passion and the ability to work incredibly hard, that is someone worth backing.”

The virtual world that would become Second Life (it was first known as Linden World) opened up to the public in 2003, using 16 servers, each one representing 16 acres of virtual-world real estate. “It was essentially an empty plain of almost nothing,” says Rosedale. “We didn’t really know how things would go. We only knew that we wanted to build some kind of platform on which people could create things. That freedom, which is very similar to the way the Internet developed, is one of the things that we were fortunate enough to do right.”

There were, inevitably, a few things they did wrong. Initially Linden Lab tried to make money by taxing users based on the number of objects they built. That led to a Resident tax rebellion involving, naturally, virtual crates of tea. “The revolt even had a moral voice,” writes Wagner James Au in his book, The Making of Second Life, but fittingly for Second Life, the would-be Thomas Paine was a six-foot black-and-white speckled cat named Fleabite Beach.”

That rebellion spurred Linden Lab to rethink its business model and eventually decide two important things: 1) They’d henceforth make money by selling virtual real estate and collecting monthly maintenance fees (a private island, for example, goes for U.S. $1,000, with maintenance fees of U.S. $295 a month) and 2) Resi­dents would be allowed to keep the rights to everything they created in-world.

“What Second Life did that really set it apart from other virtual spaces was to tear down the fourth wall as it were, and embrace the idea that what people are doing inside this virtual world might matter outside of it,” says Julian Dibbell, a journalist who has written extensively on the topic of virtual worlds. “They said, not only are we going to give you lots of tools for creating content in this world, we’re going to let you own the copyright to all this stuff you create. Furthermore, we’re not going to interfere with markets for these things you create. You can make a real living doing stuff in this world.”

It’s difficult to estimate how many users can live off what they make in Second Life, but Rosedale estimates that about 60,000 make more money than they pay Linden Lab. “It’s an entrepreneurial environment that creates opportunities for people all around the world,” he says. “It’s a tremendous economic, gender and background equalizer.”

That theme of empowering others also flows through the Linden Lab culture, which has remained astonishingly non-hierarchical and collaborative even as it has grown to 330 employees in six offices, including two overseas. (There are now 35,000 servers, housed in San Francisco, Dallas and Phoenix, supporting Second Life.) One signature Rosedale tradition is the Love Machine, a system by which employees can publicly thank or praise others for favors or good work. That praise translates into points, which converts to money—real-life money—at the end of each quarter. “It turns out it’s very fun to give love, and it’s very fun to receive it,” says Meadows. “You actually get a bonus in your paycheck every quarter when the love is finally tallied. In some sense, it allows everybody to spend the company’s money and allocate it to other people.”

In March 2008, Rosedale stepped down as CEO to focus on improving the Second Life user interface. That is critical, he says, for Second Life to reach its destiny as the next big thing on the Internet. “The most prominent and common thing that people will do with the Internet in, say, a decade, is Second Life,” says Rosedale. “Not necessarily Second Life in its current form, but what it’s going to evolve into. I think 3D environments, where people are in there together and able to communicate and share information—that represents the future of the Internet. However it evolves, it’ll be interesting to watch.”

Kelli Anderson is a senior writer at Sports Illustrated.

"Initially Linden Labs tried to make money by taxing users based on the number of objects they built. That led to a Resident tax rebellion..."