The Making of Second Life

Wagner James Au

• Publisher: HarperCollins e-books
• Year: 2009
• ISBN:
  9780061747243
• Topic: Business
• Subtopic: Business General
• Index: Business

The wholly virtual world known as Second Life has attracted more than a million active users, millions of dollars, and created its own—very real—economy.

The Making of Second Life is the behind-the-scenes story of the Web 2.0 revolution's most improbable enterprise: the creation of a virtual 3-D world with its own industries, culture, and social systems. Now the toast of the Internet economy, and the subject of countless news articles, profiles, and television shows, Second Life is usually known for the wealth of real-world companies (Reuters, Pontiac, IBM) that have created "virtual offices" within it, and the number of users ("avatars") who have become wealthy through their user-created content.

What sets Second Life apart from other online worlds, and what has made it such a success (one million-plus monthly users and growing) is its simple user-centered philosophy. Instead of attempting to control the activities of those who enter it, the creators of Second Life turned them loose: users (also known as Residents) own the rights to the intellectual content they create in-world, and the in-world currency of Linden Dollars is freely exchangeable for U.S. currency. Residents have responded by generating millions of dollars of economic activity through their in-world designs and purchases—currently, the Second Life economy averages more than one million U.S. dollars in transactions every day, while dozens of real-world companies and projects have evolved and developed around content originated in Second Life.

Wagner James Au explores the long, implausible road behind that success, and looks at the road ahead, where many believe that user-created worlds like Second Life will become the Net's next generation and the fulcrum for a revolution in the way we shop, work, and interact. Au's story is narrated from both within the corporate offices of Linden Lab, Second Life's creator, and from within Second Life itself, revealing all the fascinating, outrageous, brilliant, and aggravating personalities who make Second Life a very real place­—and an illuminating mirror on the real (physical) world. Au writes about the wars they fought (sometimes literally), the transformations they underwent, the empires of land and commerce they developed, and above all, the collaborative creativity that makes their society an imperfect utopia, better in some ways than the one beyond their computer screens.

Chapter 1

Touching Knowledge

From Virtual Reality to Real Company

If Second Life becomes an integral part of the Internet’s next evolutionary stage, it’s still quite possible that few will remember Linden Lab, the company that nurtured it in the early years. (Ask people who came of age in the twenty-first century if they remember Netscape, creator of the first commercial Web browser; expect blank stares.)

Building the metaverse wasn’t even the company’s main goal when it began operations in 1999, in a warehouse on Linden Street, a narrow alley in San Francisco’s Hayes Valley. Like many parts of the city during the Internet’s first boom times, the street teetered between gentrification and drug-addled squalor. On one end of Linden were upscale restaurants serving the arrogant young mandarins of dot-com excess; on the other was an unattended parking lot with a clientele who often slept in their cars. Linden Lab’s immediate neighbors were wholly appropriate for the world that would eventually emerge from their servers: a dubiously grungy auto body garage and a fetish boutique.

Into this unlikeliest of spaces came Philip Rosedale, clutching the keys to his shabby new office. He’d just left his position as chief technology officer of Real Networks—then the Net’s audio streaming software of choice—and plowed a million dollars of his own money to build…well, at the start, that part wasn’t exactly clear.

Born in 1968, Philip Rosedale is tall and lanky, with a triathlete’s build and the cheeky, boyish good looks usually associated with Hollywood teen idols. (To rib him on that front, some of his waggish employees once cut out a photo of Rosedale from a magazine profile, glued it into a collage of teeny-bopper stars from the eighties, then tacked the mess to the bulletin board at the company’s front entrance. For months afterward, visitors to Linden Lab would get their first glimpse of the CEO as a disembodied head floating amid a montage of Mark Hamill, Michael J. Fox, and Emilio Estevez.) Rosedale has light-colored eyes, and during his rhetorical crescendos (which are frequent), they go wide with a kind of wonder that gives anything he’s saying an aura of the inevitable or the evangelical, or both. He is prone to flights of gratuitous cosmology, though it’s clear he sees these as directly related to the day-to-day of running his company. Then again, it sometimes seems like conversational judo to dodge oncoming practical questions by flipping them into the stratosphere. (A Second Life subscriber once asked him where Linden Lab was going as a corporation, and Rosedale answered by first talking about the birth and expansion of the entire universe.) Whether it’s everyday chat or a bout of ontology, however, Rosedale’s honorific of choice is generally “dude.”

He spent his earliest years in Maryland, the oldest son of a U.S. Navy carrier pilot who later retired to become an architect and an English major who left her teaching position to raise Philip and his three siblings.

“For a little while, because there was no good public school,” Rosedale recalls, “I went to a born-again Baptist school, no kidding, in trailers, in single-wides, in Hollywood, Maryland. And it was so interesting because they just…preached fire and brimstone, and it was crazy, and it scared the crap out of me.”

For a time, it turned him into a pint-sized proselytizer. “So I would go around and ask people, ‘Have you been born again?’ So I think that actually helped me critically examine the world around me in a really profound way…I [later] realized, this is driven by people, this is not driven by some fundamental truth…But it left me with a kind of appreciation of deep thoughts and meaningful things. I just think I kind of had to take that and make my own some sense of it at some point.”

Traditional religion discarded, something still kept him yearning to visualize the absolute.

“I can remember standing in the backyard near the woodpile,” Rosedale recalls. “Looking into the woods, I can remember thinking, ‘Why am I here, and how am I different from everybody else? What am I here to do? What is my purpose here?’ But I don’t think I thought it in a real religious sense…I always had this strong [sense of], ‘I want to change the world somehow.’” Thinking back on it now, Rosedale wonders if this was the ultimate origin of Second Life, when he began feeling about for a goal that would match that insight.

His experiences with computing would turn that sense of wonder in a practical direction. As an early teen, he read about a single-cell simulation conceived by theoretician Stephen Wolfram, intended to demonstrate how complexity could emerge from nature if a cell reproduced through very simple rules. Rosedale got Wolfram’s simulation working to his satisfaction in 1982 on an Apple computer owned by his aunt and uncle in Santa Barbara. Starting with a single pixel, the Wolfram program quickly transformed the monitor into a starburst of activity.

“You can see the pattern evolving,” Rosedale recounts, “so when you get something growing, it’s like a little Christmas tree going down the screen. So I looked at that, and I [thought], ‘Oh my god, you can simulate…anything.’” That intuition was enforced a couple of years later, when he and a friend tinkered with a Windows program that displayed Mandelbrot sets, mathematical constructs that seem, at a distance, to be a single crystal form but as you keep magnifying, reveal layers of thriving intricacy. Once again, he saw the richness and variety of life, simulated through an elegant flourish of code.

Unlike most computer programmers, whose creativity is entirely consumed by the digital, Rosedale maintained a loop into the real world; he had a yen to tinker and reshape it. As a kid he wanted his bedroom door to slide up and down, like in Star Trek, so he got out some tools and made it so. Which is why his parents came home one day to discover that he’d not only taken his door off its hinges but had gone up into the attic, cut a deep groove through the ceiling, and attached it to a pulley system, instead.

And though it seems inevitable that Philip Rosedale would, through his interests and aptitudes, originate Second Life, it was his college girlfriend Yvette who first brought Snowcrash and its notion of a 3-D Internet called the Metaverse to his attention. She bought the novel for his birthday in 1992, but as he tells it, what Yvette really did was link Stephenson’s book to a half-formed vision Rosedale already had, even before being aware of it:

“I remember the idea of this sort of digital genesis…floating in the darkness like an avatar, and you had like a tool belt, and the tool belt allowed you to make things…shapes, and surfaces and stuff…and they’d show up near you and you’d stretch them and shape them and everything.” These changes would happen dynamically, he decided, and from the start, he saw what would become Second Life, for it was implicitly a shared space—other people would be avatars like you, and they would see what you were doing and have the ability to modify or contribute to your work.

He would think about this vision often, while he programmed; his dream interface would be the human body. “How can I do this, how can I be in the machine?” he’d ask himself while he coded. “Not to be in the machine and play Doom, but be in the machine and build things.” The hyperviolent first-person shooter is often (incorrectly) credited with being the first fully 3-D game, but the title actually belongs to Ultima Underworld (1992), a cerebral dungeon exploration adventure created a year before Doom by a Cambridge studio bristling with mad-scientist graduates from nearby MIT. In Underworld, you were placed in a vast cavern; you could look up and down, swim in streams, and fly. There were rudimentary lighting effects that furthered the illusion of distance and mystery, and the sense of being inside a living world. Rosedale estimates that he played Ultima Underworld for a hundred hours—another affirmation of the ideas he was already germinating.

After moving to San Francisco when Yvette, now his wife, took a job there, Philip’s Internet tinkering led him and a college friend to create FreeVue, a compression software company that enabled computers to stream video on the slow dial-up connections of the time. It interested RealNetworks enough to make a purchase offer, which led to a phone call from a Real board member named Mitch Kapor. Founder of the Lotus Development Corporation and creator of the company’s 1–2–3 business software, Kapor is often cited right after Steve Jobs and Bill Gates on the roster of those who led the personal computer revolution. But as Kapor remembers their first conversation, Rosedale didn’t even know who he was.

“Which,” as he wryly puts it now, “was a little surprising.”

Acquaintances made, RealNetworks CEO Rob Glaser bought himself the FreeVue software—and a new chief technology officer. Rosedale moved up to Seattle to work for the company through the mid-nineties and toward the millennium. But he always considered it a means to the end of building the visualized world he’d been picturing in his head for so many years. (After catching the first Matrix film with some RealNetworks colleagues, Rosedale left the theater glum, announcing to them, “But that’s what I was gonna make!”) As he remembers it, he was just waiting for broadband and 3-D graphic technology to catch up to his vision.

“We all imagined the Internet to be social and 3-D,” Rosedale argues now; “it’s just that the technology didn’t allow it. We all fantasized about the information superhighway; we imagined ourselves driving down it in three dimensions—with other people next to us.” It’s just that the Internet back then wasn’t fast enough to complete this transformation in a way that was technically feasible or collectively accessible. (Then again, the entire history of the computer reflects this desire to give binary data a metaphorical physical substance. Take computing’s icon-driven interfaces, which depict programs and files as pictograms of office supplies and other real tools, or in a “desktop” operating system, or in “pages” and “sites” of the Web. Digital information makes sense to most of us only when it has a real-world analogue.)

After Rosedale left Real in 1999, Kapor briefly brought him on as an “entrepreneur-in-residence” with the venture firm Accel Partners, yet another company where Kapor was a board member. With Kapor’s support, Rosedale pitched variations of his ideas there, but he couldn’t get funding. This would become a recurring pattern in future years, with Rosedale describing the concept that would eventually be Second Life to investors and getting hard stares in reply.

Looking back on it now, Kapor holds no grudges. “Virtual reality was already an over-hyped area; there had been a number of unsuccessful efforts at it.” At the same time, “multiplayer online games, which was the only other analogue, had also been unsuccessful for a lot of people…[investors] didn’t see what it could become and the only thing that it looked like were other things that had failed and it felt very risky.”

This left Kapor free to personally invest in Rosedale, joined in this by Jed Smith from Catamount, another venture firm. Together they planned a “long runway” of development, designed to keep the company operating over an extended stretch on a limited budget.

“We should be prepared for several years before anything happened in terms of revenue, much less profitability and in terms of recognition by the outside world,” Kapor remembers thinking. “Sometimes companies starve for lack of money, but sometimes they choke to death from too much.”

Toward early 2001, Linden Lab officially incorporated. In the warehouse, Rosedale and his tiny staff sat in a small circle and started a conversation that’s usually asked a lot earlier than two years into a company’s life: What, exactly, were they in business for?

They had a few options from which to choose. While running early trials of what would eventually become Second Life, they were also toying with “the Rig,” a virtual reality/touch-activated hardware prototype, with the vague idea that the two technologies could somehow interact. For starters, as first Linden employee Andrew Meadows remembers it, the CEO suggested that Linden Lab could get into the fast-food business: “‘We now have a company, what are we gonna make? We could outfit [the warehouse] to make a restaurant; we can sell hamburgers.’” Meadows thinks Rosedale wanted to challenge his employees to put aside everything they had been working on up until then so they could improvise a totally new direction.

The hamburger stand, however, was quickly tabled. The tiny Linden team also decided (albeit reluctantly, for some) to abandon the Rig so they could concentrate on this world they were making—even though it was, at that point, just an untrammeled ocean that moved between two servers. (In the beginning, all was without form and void.)

San Francisco during the dot-com boom was a place where capitalistic excess and idealism overlapped and merged and from up close, seemed indistinguishable. Which is probably why Rosedale attributes the last facet of inspiration for what became Second Life to what he saw in the middle of a Nevada wasteland. In 1999, he and Yvette went, along with thousands of hipsters from around the Bay Area and the world, on the annual pilgrimage to the heart of the Black Rock Desert—Burning Man, a freeform, quasi-gnos-tic art experience and improvisational community that reaches its apex over the Labor Day weekend, then disappears just as quickly until the next year.

Out there on a playa that was nothing but sand, wind, and the unforgiving sun, a community suddenly appeared, where high-tech millionaires mingled with impoverished bohemians and everyone in between. To Philip, it was markedly better than the society he’d left behind. At Burning Man, real-world commerce and brands are looked down upon, with all economic transactions conducted through barter. (Rosedale remembers a Burning Man massage parlor, where you got a back rub, but only after you yourself had given one.) They attended a rave with a live DJ, held in a thin Airstream trailer, with Burners crowded knee to knee in the narrow space, undulating from a seated position; they watched daredevils on a flying trapeze, cutting long shadows across the Black Rock expanse; they saw towers and spires and onion-shaped domes that evoked architecture from across the planet. Walking through the desert, they found themselves at the entrance of a hookah lounge made of hundreds of Persian carpets.

“So you’d lay on the pillows,” Rosedale recounts, eyes twinkling at the memory, “and you’d feel like an exotic Asian king, and you’re looking out on the parched [desert]; the line of sun starts at the edge of the rugs, and you see that hot desert, and you imagine you’re Kublai Khan on a bender.” It was illusion made concrete, and it led to an insight.

“They were just structures of the mind,” Rosedale recalls, thinking about Burning Man. “It reinforced that idea that what we believe in or what we make of things is all that is real. It was unreal because everything was clearly made of found materials and was transitory. But it was real, because when you were there, it was real to you.”

And in that perceptual shift, something shifted in him, too. “I was just blown away by the fact that I was willing to talk to anyone. That it had this mystical quality that demolished the barriers between people. And I thought about it…‘What magical quality makes that happen?’” Though it wouldn’t exactly fit in a business plan, it was an intuition he’d pursue in building Second Life into a full-fledged online world.

And to do that, he began assembling a staff ideally suited to that task. Among the first hires were a sex educator, a rock star, a medical doctor, a late-night talk show producer, and, of course, a weapons expert trained to work on a nuclear submarine.

Chapter 2

Imagining the Net in 3-D

Shunting the Datastream into Rivers and Sky

Had you come across Second Life in 2005 or later, you might have assumed it was conceived from the start to leverage the latest in Net business trends. Described by Linden Lab as “a 3-D online world created and owned by its users,” the wording evokes both the concept of user-created content so in vogue during the Web 2.0 era of the Internet industry and the enormous popularity of online games like Vivendi’s World of Warcraft. With even more succinct shorthand, you might even cite the Metaverse of Snowcrash. (As you might have spied, even reading this far, Stephenson’s world already has a synonymous relationship to Second Life.)

Second Life was originally developed, however, with none of these things exactly in mind.

Second Life the beginning, Second Life was a chaotic and unformed place, and like an ecosystem just taking shape on an early planet, it evolved more or less organically, in a haphazard way the original creators did not at all conceive. They were like the “clockmaker” God imagined by Enlightenment philosophers, albeit one whose fumbling hands often spewed springs and gears everywhere, and with the added qualification that their creation, so to speak, showed them the way.

“In the very beginning, he wanted to make an interesting organic space,” Andrew Meadows remembers, describing Rosedale’s earliest ideas for the world they intended to build. “So some of the inspiration wasn’t so much the Metaverse as described by Stephenson [in Snowcrash].” At the time, Rosedale was more inspired by computer-generated imagery he saw at a 3-D graphics expo, which depicted lush, natural settings with so much realism, the pixels seemed vividly alive. To Rosedale, the next step was taking those settings...