Five Things Rosedale Did Right

In their haste to criticize Linden Lab, the press often miss the fact that they built something nobody else could and somehow made it profitable. Inc.com carried a recent interview with Philip Rosedale, CEO of Linden Lab. Found Read picked up on it and served up five things that Rosedale did to get Second Life funded, growing, and eventually profitable in the face of some long odds.

Here's a summary:

1. He knew his idea was too early for the market, so he waited. - The idea had first occurred to him in the mid-90s while he was watching one of the first Internet service providers being built in San Francisco. You couldn't really do 3D on PCs back then. Under those conditions there was no way to make a sexy, fun and fast enough product.
2. He figured out what he was going to need to know, and started learning. - To make Second Life a reality he knew he had to learn how to manage a team and how to handle large-scale project management. He brought himself up to speed through his experiences working with Real Networks.
3. When he couldn't sell the idea, he sold himself. - "Second Life was just unfundable. It was just the dumbest idea ever," Rosedale says. Ultimately even those who funded the project weren't necessarily convinced that it was technically even possible, but they had faith that Rosedale could pull something worthwhile together.
4. When growth was slow, he made the hard decision about layoffs. - Second Life didn't really take off for six years. Something had to be done to keep the company afloat. "There were 31 of us and 11 of us left. That was in late 2003, when we pretty well thought we were dead."
5. He put development in the hands of the users. - Getting true buy-in from the users meant allowing them not only to make the world itself, but allowing them to retain ownership over it. It meant allowing them to see monetary value in the world they were building. "Let’s just make this a real world. Let’s let it have a real economy and let’s make property have real value. There was a lot of buzz around that. The investors could see this thing starting to go. In early 2004 we got a couple million bucks more."

Of course, it's where Rosedale goes from here that matters now. Rivals to Second Life are cropping up everywhere, and his creation is soon to be one of many rather than something unique. On top of that, people are used to 3D environments functioning properly these days rather than crashing several times a week. Only time will tell if Rosedale has the moves to continue Second Life's growth and stem the tide of attrition.