Linden Lab and Second Life Case Study

Linden Lab founded Second Life in the year 2003 and the social network that had targeted reaching millions of online users who would connect in a virtual world faced a huge challenge ahead of it. Most of the users had claimed the demand for a virtual world that was user generated unlike the traditional games that users were used to. Despite this fact though, Second Life continued to establish itself with a strong growth which earned it a massive $77 million of revenue five years later. Growth was the main priority for Linden Lab although this was becoming more of a challenge due to the fact that the technical infrastructure was straining in the process. The early adopters also seemed to be different to the mainstream consumers and this fact proved to be very tricky for Linden Lab. The current dilemma is therefore whether Linden Lab ought to continue with their services as normal or change strategy to adopt mass consumers currently using online services.

Despite the fact that rate of new users in Second Life slowed to almost half of what was realized in the year 2007, the company was still capable of recording profits mainly due to the fact that the early adopters that had been attracted by Second Life had been very loyal. On the other hand the company was restrained form more growth due to the fact that the technical infrastructure in Second Life made it very difficult for new users to master command tools that could be used for various function in the virtual world. The fact that Second Life also had difficulties in dealing with fraud and antisocial behavior just like other virtual world sites also made growth to be constrained.

Rapid growth remains an imperative strategy for Second Life mainly due to the fact that consumers in many fields that deal with social networking and virtual worlds demand that there be mass for them to be involved in. actually having a critical mass is what is used to rate and determine the competitive edge that virtual worlds have over each other. In an effort to ensure that Second Life survives in the market and offers optimal satisfaction to the consumers that it has rapid growth has to be achieved. This can be made easier by the company ensuring that the services that are offered Second Life bear the capability for the users to customize their world in their own desires.

Geoffrey Moore's "chasm" concept applies very significantly to the situation at Second Life. The basic fact that the technology market is divided into two portions of early adopters and early majority is very true. The early adopters remain very loyal to the product despite starting to use it with their own knowledge on the benefits they could reap. The early majority on the other hand are actually the new users that the company was trying to lure in 2008 as it lost them as soon as they used the product. The strategy of dividing the early majority into two then ensuring the smaller portions gets to realize the full benefits of Second Life would be the only way out towards marketing Second Life to new users.

Linden Lab is currently operating on three main platform strategies which are listed as: continue in the current way of laissez-faire, taking an activist approach and adopting ecosystem partners to offer consumer needs and finally Linden Lab developing the solutions all by itself. The main four market targets for Linden Lab are consumers who are over the age of 18 years, teenagers, educators and enterprise customers. In regard to the laissez-faire strategy, its main failure is very obvious in that the company will not be able to tap new consumers in the market as it has already failed before. The only advantage that is assured while using the strategy is that the early adopters of the virtual site are still tapped in the company. By operating as an activist with ecosystem partners, the company is bound to receive heavy competition from the partners hence optimal customer satisfaction would be granted. This would lead into vigorous innovations which would tap the early majority into the company. On the other hand, the company would share the revenues with other brands hence loosing its grip of the market.

The main benefit that this change would result to is the fact that the new management created would be better suited to handle the new job at Linden Lab which is transforming the product that had already been invented by the older management. The employees would be motivated, guided and managed by the new team. On the other hand, the employees of the company and the corporate culture both remain vulnerable to radical changes in the organization. This inflicts fear in them.

The best strategy that would be adopted by Linden Lab would be the one involving Linden Lab acting as an activist and having other ecosystem partners. This would attract success to the company as more early majorities would be attracted to the competitive services offered. Later on, Linden Lab would even go ahead to have an acquisition on the ecosystem partners so that it has more command in the industry.

The main risk that is involved in this strategy is competition and rivalry from the partners in outdoing each other so as to offer the best to Linden Lab. This could effectively be curbed by Linden Lab having an acquisition on the partners so that they all serve the same organizational goal.