Book Excerpt



An excerpt from the new book

How Innovators & Entrepreneurs
Discover & Profit From Business & Technology Trends

by John H. Vanston, Ph.D. with Carrie Vanston

Reprinted with permission



The excerpt, below, covers the Minitrend of people’s increasing involvement in virtual worlds, and some of the opportunities this opens up for entrepreneurs and innovators. The excerpt provides a perfect example of how MiniTrends are discovered, analyzed, and exploited.

The authors begin with the background of the Minitrend, introducing virtual worlds such as Second Life and Active World and explaining the use of avatars, virtual currency, virtual real estate, and multiple identities.

Next they look at current trends: how schools are using virtual worlds, the integration of virtual and real worlds, the growth rate of virtual communities, commercial uses for virtual worlds, and how the government uses virtual worlds.

The authors then discuss the business opportunities arising from the increased immersion in virtual worlds. Some of the current opportunities include developing software to power these worlds; virtual reality marketing and advertising; collecting “expert user” information in large organizations; trading currency; and others.

Finally, the authors illustrate their discovery process: how they stumbled on this Minitrend and approached investigating it. Learn how entrepreneurs are using virtual worlds for focus groups, for distance learning programs, for armed forces training — even to design and build things used in the real world.

More information about the book, MINITRENDS, and authors John and Carrie Vanston, follows the excerpt. Enjoy!




Virtual worlds are computer-based platforms that allow participants to engage in a wide range of real-world type activities, e.g., buying virtual world property, building and furnishing virtual world homes and offices, producing and selling virtual world goods, traveling, taking part in virtual world social activities such as parties and fundraisers, and communicating and having meetings with other participants. The virtual world concept grew out of alternate reality games in which the story is developed by participants’ decisions and actions. Virtual world platforms, however, are not really games, since there are no scores, no winners or losers, and no game endings. Although the individuals and organizations that originate and manage the platforms establish ground rules and exercise some control over platform activities, in most virtual worlds, platform participants generate the bulk of program content.

There are a number of virtual world platforms available, and new ones are constantly being developed. A recent report by Virtual World Review listed twenty-nine platforms classified by types, e.g., by age groups, by experience with programs, and by ways to access the virtual world. Each platform has its own rules, characteristics, and special features. Currently, the most popular platform is “Second Life,” initiated and operated by Linden Laboratories, Inc. The volatility of virtual worlds is reflected by the discontinuation on March 9, 2010 of “There,” formerly the second most popular platform.

To participate in a virtual world platform, a user creates an “avatar,” a 2D or 3D computerized representation of himself or herself with a related name or “handle.” The avatar can be a person, an animal, an imaginary creature, or even an inanimate object. Depending on the specific platform involved, the avatar can be distinguished by sex, age, physical characteristics, and clothing. (Younger users tend to be very imaginative in developing their avatars, while older users tend to select avatars with characteristics similar to their own.) Some platforms allow users to display emotions (“emotes” or “smileys”), such as happiness, sadness, gratitude, or uncertainty.

Recent developments in platforms include “text to speech” technology that allows an avatar to actually speak in chatting sessions and “dynamic avatars” in which limited physical activities can be preprogrammed. Users are not restricted to a single avatar in each world but can develop multiple identities and even interact with themselves. In most platforms, avatars can travel easily by teleportation, foot, helicopters, submarines, hot air balloons, special user-conceived vehicles, or even special user-conceived vehicles.

Most platforms have in-world currencies. For example, Second Life utilizes Lindendollars (L$). Users can acquire these virtual world currencies by purchasing them in real world currencies from the platform manager, by borrowing from virtual world banks, or from sales or rent from other users. The value of these virtual world currencies varies depending on in-world circumstances. However, platform managers sometimes act as a central bank to maintain some stability in the currency. At present, the value of an L$ is about .004 U.S. dollars which makes it slightly more valuable than a Japanese Yen.

One important activity in many platforms is buying real estate and building structures on the property. In the Active World platform, there are over 1,000 active building worlds to build on and tens of thousands of builds. AlphaWorld, Active World’s largest public building world, has more available building space than the real-world State of California (but without the taxes).

Current trends

Although virtual worlds emerged on the market a number of years ago (Active World was launched in 1995 and Second Life in 2003), the industry is still in a transformational stage.

The exact size of the market is difficult to determine. There are, however, strong indications that the market is growing. For example, Second Life reported 9.8 million registered accounts in 2006, and 13 million in 2008. In 2010, Second Life reportedly reached 20 million accounts.

In addition to the growth in registered accounts, continuous enhancements are being developed. In September 2008, the Merl company launched a beta test of a social network that integrates nineteen virtual world platforms to meet the desire of users to coordinate lives in different worlds. Although full integration is currently limited for some platforms, the goal is to bring together the different virtual worlds and create an integrated virtual world system.

In July 2008, Linden Lab announced that it had successfully “teleported” avatars into a virtual world operated by IBM. It is generally believed that interoperability between different virtual worlds, each of which has its own proprietary software and unique program, will greatly enhance the attractiveness of the concept. It might be noted that this project only teleported the avatars themselves and not their clothing. The avatars arrived in their new world as gray, nude-like forms, which may have caused them some embarrassment.

Another important trend is the growing porosity between the virtual world and the real world and the increasing capacity of users to move smoothly between the two.

A significant trend in the virtual world environment is the increasing use of these worlds for practical purposes. A number of commercial organizations are evaluating virtual worlds for product advertisements, new product testing, identification of new markets, uncovering unexpected problems with new marketing programs, and other commercial purposes. Such tasks can often be performed in virtual worlds much faster, cheaper, and with less risk than traditional marketing programs.

As an indication of the seriousness with which many participants take their virtual lives, in Tokyo, Japan recently, a 43 year-old piano teacher, shocked by the fact that her virtual husband divorced her without warning or reason, logged on with his platform ID and password (that he gave her during the happy times of their “marriage”) and murdered her virtual spouse. In the real-world, she has been charged with illegally accessing a computer and manipulating electronic data and faces a five-year prison sentence or a fine of up to $5,000. Whether or not she will be tried for murder in the virtual world, and, if so, whom she will hire as a lawyer is not known.

A particularly interesting and practical use of virtual world capabilities is in the educational arena, where they are being used for simulation, research, performance, design, collaboration, and communication. The technology is proving particularly valuable in distance learning environments. A number of colleges and universities have found that use of virtual worlds allows more meaningful interaction between students and teachers located in different areas. Virtual worlds allow better tailoring of instructional material to individual students.

Major colleges and universities using virtual worlds to support their educational programs include the University of Florida, Rice University, the University of Texas in Austin, Vassar College, Harvard University, Stanford University, University College Dublin, the University of Edinburgh, Delft University of Technology, and the Hong Kong Polytechnic University. To support such programs, Second Life has established an “archipelago” of education-focused islands.

To assist students and others in learning about art and architecture, Vassar College has constructed a Second Life version of Michelangelo’s Sistine Chapel. In this recreation, the interior is depicted in great detail, while the exterior is an approximation. Participants can fly up to the top of a wall for a close inspection, look down at the inlaid floor, or even sit on a window ledge! The lower tier of the chapel normally displays panels with painted draperies. On special occasions, these panels are covered with tapestries designed by Raphael. You can click to show or hide the tapestries whenever you want.

The Educators Coop, a community of university faculty members, librarians, and K-12 teachers from thirty-two educational institutions, recently conducted a Second Life research project to examine how use of virtual world platforms can impact the professional and personal lives of participants. Results from the first six-month phase of the project indicate that using the platform allows professionals to collaborate productively with other members of their profession.

One education arena generating interest is language learning. In fact, there are several platforms, such as Zon and Wiz World, specifically developed for this purpose. Moreover, replication of cities such as Barcelona, Berlin, London, or Paris, permit students to practice new languages through virtual tourism, while engaged in more traditional learning activities, such as classroom instruction and special projects.

As an example of the increasing use of virtual worlds in new applications, the U.S. Air Force is planning to give all new recruits Second Life virtual world avatars from the moment they are accepted into the military service. These avatars will remain with the airmen and airwomen throughout their careers. It will travel with them, grow with them, change appearance with them. It will provide them a history of where they’ve been and a notion of where they’re going. In their virtual world lives, they will also be able to take classes, review materials, perform pre-deployment exercises, and tour facilities.

Business opportunities

In an arena as growing and dynamic as virtual world, the number of potential business opportunities is almost endless.

The most obvious opportunities for qualified individuals and small companies are those associated with software development. Although developing a new virtual world is expensive and requires a great deal of time and effort, the existing worlds are very amenable to new software that can add new features and capabilities to their existing worlds, e.g., platform add-ons that reduce computer memory and processing requirements, reduce the learning curve for participants, or make the worlds more accessible to new markets.

All of the virtual world platforms are interested in adding users to their systems, and individuals and groups who can assist in this goal will be attractive to their real-world executives. Software modifications and add-ons are often developed by small groups (two to six people) with little available capital. People interested in defining industry requirements and identifying possible business opportunities are well-advised to
attend an annual Virtual Worlds Conference or obtain conference proceedings.

As indicated in the Current Trends section, many commercial organizations are evaluating virtual worlds for advertising effectiveness and market testing for new or reintroduced products and services. There will be needs for groups that understand how virtual worlds can be utilized for these purposes and how results from such activities can be properly evaluated. In similar manner, education and library organizations may be interested in assistance from knowledgeable virtual world experts in visualizing, conceptualizing, and formulating methods and techniques that will increase the value of the platforms.

Although most people are capable of participating in simple virtual world activities, many users may wish to enhance their skills for more complicated tasks, such as developing creative avatars, more complex buildings, or more attractive furniture, landscapes, vehicles, etc. Virtual world experts may be used to either instruct novices in more complicated procedures or, perhaps, assist them in utilizing the capabilities of the worlds more effectively.

Users can use the graphic, animation, and sound tools of the virtual world to cheaply design buildings, furniture, clothing, and art objects that can then be transferred into the real world and sold for profit. Many of the platforms have features specifically designed to assist writers and artists in developing unique and novel products. These tools may also prove attractive to those in the fast-paced fashion industry. Some platforms allow users to retain rights to objects designed on the system.

Because users are able to sell virtual world currencies to other users for real world money, astute traders can actually accrue real incomes from virtual world activities. Linden Lab has reported that in February 2009, 233 users had made profits of more than $5,000 and a few users have grossed in excess of a million dollars per year from Second Life transactions.

Although most users are fortunate to earn enough money to meet virtual world expenses, there is always room for people with special skills and aptitudes to make real world money in the make-believe world.

Discovery process:

Although I was vaguely aware of the existence of the Second Life platform, I considered it basically an escape mechanism for people who didn’t have a First Life. I became aware of the potential impact of virtual world activities at a lecture by Dr. Leslie Jarmon at the University of Texas at Austin. Later, I corresponded with Dr. Jarmon by e-mail. She gave me additional information about current developments, sent me copies of two articles on the subject that she was submitting for publication, and reviewed an earlier version of the material included in this section.


About the Book


About the MINITRENDS Authors


Awards, Reviews, and Endorsements


Copyright ©2011 by John H. Vanston, Ph.D. All Rights Reserved.
Please feel free to duplicate or distribute this file as long as the contents
have not been changed and this copyright notice is intact. Thank You!

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