Thursday, October 4, 2007
Bringing Up Babytech
Rachel Rosmarin, 06.19.07, 4:30 PM ET
What happens when gadget-crazy, Internet-obsessed, financially secure adults have babies? A new market is born.
U.S. parents spent $2.9 billion in 2006 on baby goods, and $337 million of that was directed at gadgets like monitors, thermometers and the like. Now a smaller, but growing, industry is leveraging the same technologies people rely upon for business and pleasure--such as Web video conferencing, wireless frequencies and digital media players--to aid in the displaying, entertaining and rearing of offspring.
Most people with an e-mail address have received at least one message containing an attached photo of a splotchy, hours-old newborn. But for some parents, that type of digital birth announcement isn't nearly enough to do their child justice. Next come the slide shows, videos, Web sites and blogs devoted to babydom.
In Pictures: High-Tech Baby Gear
''New parents are the biggest inflection point, except for the teen market, when it comes to entering the blogosphere,'' says Tina Sharkey, chief executive of Babycenter.com. ''These people finally have a story to tell for the first time, news to share that keeps changing. It's a perfect platform for photos, videos and sounds.''
To record those precious memories, parents are investing by the droves in digital cameras and high-definition digital camcorders that cost more than $1,000. But for parents who want easy access to the Web, a tiny, durable and cheap camcorder like Pure Digital's Flip camcorder might serve the purpose--it includes software that automatically publishes video to sites like Google's YouTube. ''Some people like to keep controlled access to their baby, but we live in a culture where parents think they have bragging rights,'' says Sharkey.
There's no better audience for baby bragging than friends and family. That's why many moms and dads are setting family members up with Web cam-enabled computers or stand-alone video phone systems; this way, the interactive Baby Show can be broadcast on demand.
One popular way to accomplish this is with Apple's MacBook laptops, which houses a built-in camera called iSight and operates with the company's iChat software. However, both parties in the video conference need to own a Mac for this to work. Rather than investing in a new computer, products like WorldGate's Ojo video phone accomplish the same task without a computer.
Beyond using technology as a baby syndication tool, parents want to familiarize their tots with technology beginning in the crib. Technology can be soothing--parents are creating iTunes playlists for their iPods filled with upbeat or sleep-inducing music. They place the gadgets right into the cradle or playpen with a baby speaker system for mp3 players, such as Munchkin's iCrib device. Some toy mp3 players could become teething devices, such as the pink plastic teddy bear-shaped player from Baby Bidou.
Parents who want to give their infants a very early start in computers can purchase a special keyboard for pudgy fingers, such as the Comfy EasyPC, and software designed specifically for babies younger than 2 years. Parents who compose e-mails with their babies in their arms know how eager even 6-month-olds are to touch the keyboard. This special software genre known as lapware teaches babies that patterns onscreen change when the keyboard or mouse is touched.
But none of these baby-oriented uses of technology are must-haves. The most crucial type of baby tech is the kind that keeps kids safe and parents reassured. The No. 1 baby gadget all over the world is likely the baby monitor. More than 87% of parents surveyed by Mintel International reported owning one. Sales in the baby wellness and safety product category, of which monitors, baby thermometers and other health devices are a part, increased 8% between 2004 and 2006, according to the Mintel study.
Most baby monitors sold today are wireless. Some feature special digital bandwidth technology to filter out interference from other nearby baby monitors or household appliances, but only a few are video-enabled. Many parents invest in a video baby monitor to keep an eye on sleeping babies in a room across the house, but some use video monitors or Web cams to observe nannies and babysitters at work.
There are some surprises, though: One popular video monitor model, Summer Infant's handheld monitor, recently showed an Illinois mother an unexpected video feed. On June 10, her baby monitor began displaying video from inside the NASA space shuttle Atlantis. Her baby was still safe it its crib, but the monitor was picking up a wireless video signal being broadcast from a Web site.
http://www.forbes.com/2007/06/19/baby-technology-web-tech-cx_rr_0619babytech_print.html
Six High-Tech Disruptors Ready To Hatch
Six High-Tech Disruptors Ready To Hatch
Clayton Christensen and Innosight 09.04.07, 6:00 PM ET
Oftentimes, technology is at the forefront of business disruptions. Mobile telephony, for example, has been a disruptive force for traditional wireline telecommunications providers. Silver halide photographic film is being replaced by digital photography.
Here we take a look at some promising emerging technologies. While great technology isn't enough, with the right business models, these technologies could be at the core of future disruptive change.
Is your business about to be torpedoed by a "disruptive attacker?" Click here to stay ahead of the curve with Clayton Christensen's, Strategy & Innovation newsletter.
Charging Wireless Gear Wirelessly
A physicist at the Massachusetts Institute of Technology (MIT) is researching a process that would be able to charge electronic devices wirelessly, doing away with the array of various cords and chargers so many people are forced to cart around.
Professor Marin Soljacic recently released a paper, titled "Wireless non-Radiative Energy Transfer," that details how a specific magnetic field could be set up in a manner that would enable devices equipped with a special receiver to get a charge from a wireless antenna, doing away with the need to connect directly to a power source. The technology is still in its infancy and it’s unclear how expensive such a technology would be to roll out. Soljacic has begun running a series of tests at his lab.
Disruptive Sweepstakes
ePrize manages a portfolio of interactive promotions for a variety of large consumer-goods companies. Recently, the company launched a service, dubbed Caffeine, that would bring online promotions to small- and medium-sized business that up until now have largely been priced out of the sweepstakes business.
Much like Google's successful pay-per-click model, companies using Caffeine only pay when qualified customers enter their personal information. Caffeine pays for all of the sweepstakes items and handles all of the logistical and legal legwork behind the sweepstakes process. Sounding a disruptive alarm, ePrize CEO Josh Linkner told The Wall Street Journal that his company is "trying to democratize the promotions business."
A Polaroid In Your Cellphone?
A company founded by private investors who acquired some of Polaroid’s technologies during bankruptcy is trying to bring digital printing to the handheld device market. Zink has developed a special paper that can be housed in cellphones or digital cameras. When activated by heat, dye in the paper that had been colorless transforms to produce full-color images.
According to MIT’s Technology Review, a 2-by-3-inch photo could be produced in less than a minute. Zink estimates that print capability could be added to a device for about $100, while a camera and printer would cost about $200. Much like Polaroid made money on its photo cartridges--and as Procter & Gamble's Gillette famously makes loads of cash on its razor blades--Zink plans to rake in profits on its special photo paper, which would retail for about $2 for 10 sheets.
The (Auto) Doctor Is In
As automobiles have become more complex, computer-based diagnostics have replaced old-fashioned, tire-kicking techniques. In response, mechanics have purchased a host of complex, electronic tools and companies like General Motors' OnStar now offer remote, onboard computer assessments.
However, few low-cost diagnostic options are available for consumers hoping to debug their car the same way that they might debug a computer. The SAM system by Smart Auto Management seeks to provide this service with an ATM-style drive-through booth that will scan and assess over 2,000 onboard diagnostic codes in the space of 10 minutes for less than $15.
The system then provides a comprehensive report that points out potential faults in each of the car systems, from engine to chassis. These systems should be appearing in Jiffy Lubes, Kwik Kar stations and selected gas stations in 2007.
Print Your House
If everything goes according to plan, one of the largest printers in the world will soon be rolling into Los Angeles this August. After it is bolted in place, the printer will construct the shell of a full-sized house in less than a week with minimal human intervention. The eventual goal: to use rapid-set concrete to print shell houses in 24 hours that require only electrical and plumbing installation.
The inventor, Dr. Behrokh Khoshnevis, sees multiple applications of the technology, from emergency shelter construction to low-waste civil engineering projects. If successful, such contour-crafting machines could provide a cheap, convenient way to build some of the concrete structures used in major construction projects.
Here Comes The Sun
Conventional photovoltaic cells that produce solar power are similar to the high-grade silicon semiconductors used in computer. While research has led to ever-more efficient power conversion from silicon, solar-grade silicon is expensive and relatively fragile.
That’s why researchers are pursuing next generation "thin film" solar technologies to generate power. Many thin film techniques also provide greater flexibility, enabling the manufacture of solar cells directly into glass, other building materials and even plastics and fabrics. Leading thin film technologies (including low-cost organic polymers) are nearing market viability; venture-backed companies are breaking ground on massive factories to produce them.
Look for thin film cells to start picking off market niches in which their flexibility and cost advantages outweigh their inferior power production relative to silicon.
Excerpted from a recent issue of Innovators' Insights. For more analysis from Clayton Christensen's Strategy & Innovation and Innovators' Insights. Click Here.
Clayton M. Christensen is a professor at Harvard Business School and the co-founder of Innosight LLC, a Watertown, Mass., innovation consulting company.
http://www.forbes.com/2007/08/31/christensen-emergingtech-google-pf-guru_in_cc_0904christensen_inl_print.html
Monday, October 1, 2007
IPhone: It's The Features, Stupid!
IPhone: It's The Features, Stupid!
Marc E. Babej and Tim Pollak 06.22.07, 6:00 AM ET
The iPhone is the most anticipated new product launch in recent years, and the most important for Apple since the original Macintosh. Even before consumers have started camping out in front of Apple stores, branding experts--both the self-anointed and the publicly acclaimed--have trumpeted it as the dawn of a new golden era of branding.
Except research indicates the opposite. A recent study by Compete Inc. asked 680 potential iPhone shoppers this question: "How important would each of the following be on your decision to purchase an iPhone?" The results were revealing:
Price of the device: 81%
Performance of the phone: 77 %
Battery life: 76%
Overall ease of use: 75%
Design/look of device: 46%
Ease of using touch screen: 45%
Ability to synch device with music collection: 44%
Wi-fi: 37%
Ease of accessing e-mail: 37%
And, in last place: The fact that Apple makes the device: 32%
You mean, all the anticipation is about the actual, physical product and its features--and the Apple brand is at the bottom of the list, less than half as important as something as banal as "battery life"? After all, conventional marketing wisdom says that some time around 1980, consumers stopped buying products and started buying brands instead. And no brand has been more vaunted than Apple.
Could it be that great brands are the product (no pun intended) of something other than branding? In fact, they are! What's more, branding and great brands are made of altogether different stuff. Branding seeks to transcend tangible benefits, or even compensate for their absence. But great brands are built from the inside out, on tangible benefits. Branding seeks to create reality through perceptions, engendered by compelling communications.
Great brands, meanwhile, are the result of compelling products and services. The exception--a few image-driven categories such as beer, liquor or fashion--only proves the rule.
For those with a stake in selling marketing communications, branding is a convenient confusion of cause and effect. But brands such as Apple didn't become great because of good ads. Rather, the unique and differentiated propositions of the products made for good ads. Macintosh computers really are more beautiful inside and out: easier to use, and better to look at.
A brand is neither a goal nor a means, but a result of consistent delivery against a differentiating, relevant benefit. A brand is not an end in itself, and it doesn't even provide a hedge against future bets.
Case in point: Apple's flops, such as its early 1980s Lisa computer, its highly-hyped Newton PDA and the Motorola/Apple RokR iTunes phone. The Lisa was done in by a high price, the Newton by weak handwriting technology. Most recently, and most to the point, the RokR flopped because of mediocre software and hardware design. In each instance, the Apple brand was only as good as the product.
Great products speak for themselves. Not by coincidence, the iPhone ads are as straightforward as a product demo can be: a hand in front of a black background operating the device. Could Motorola or Nokia get away with this? Hardly. What sets the iPhone apart is its unique design and the promise of new features and a new standard in usability.
Those features better work--and wow--because a brand, even one with Apple's vaunted reputation, won't carry the day by itself.
Marc E. Babej and Tim Pollak are partners at Reason Inc., a marketing-strategy consulting firm that works with clients in a range of categories, including media and entertainment, financial and professional services, packaged goods and the public sector.
Thursday, September 20, 2007
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A BlackBerry for Collars of All Colors
As a human being, you’re pretty much stuck with the features you had on the date of manufacture. Very few adults ever become substantially taller, faster or more artistic.
In consumer electronics, though, it’s another story. By nipping, tucking and incorporating improved technologies as they come along, companies can refine a mediocre product through successive versions until it’s a success — if they know what they’re doing.
Research in Motion (R.I.M.), maker of the BlackBerry e-mail phone, definitely knows what it’s doing. If you need proof, just look at the new BlackBerry Curve, which will be available first from Cingular/AT&T in a few weeks. The price hasn’t been announced, but $250 with contract is a good guess. (R.I.M. also announced the cameraless corporate BlackBerry 8830, which, surprisingly, works on the Verizon network in this country and also on the ordinarily incompatible G.S.M. networks overseas.)
The BlackBerry, as any corporate white-collar type can tell you, is an addictive little cellphone with a Stuart Little thumb keyboard. Its best trick is delivering e-mail from any kind of account in real time, as it arrives, without your having to fetch it. In fact, if you have Yahoo Mail or a corporate e-mail account, your BlackBerry even synchronizes your actions wirelessly. Send a reply from the BlackBerry, and you’ll find it in the Sent Mail folder back on your computer.
Lately, though, R.I.M. has been on a quest to hook the rest of us: the hordes who place just as much emphasis on making phone calls and playing music. The tiny BlackBerry Pearl, released last year in chrome and black, may be the most gorgeous smartphone ever designed, and it won legions of new noncorporate fans.
As the torn-out hair tufts from a smartphone designer’s head can attest, however, you can’t have it all; a phone can either be sleek or have a full alphabet keyboard, but not both.
The Pearl has only 14 keys to represent the entire alphabet, most labeled with two letters. Built-in software guesses at which word you want.
That system is generally successful, but it can occasionally drive you nuts. Typing in a word that’s not in its dictionary can take minutes, as I discovered the day I tried to address a message to my friend Jennifer Bowtruczyk.
The point of the new BlackBerry Curve, then, is very simple: it’s a BlackBerry Pearl with a full QWERTY keyboard. On this new model (also called the BlackBerry 8300), every letter gets its own key.
Of course, this new phone is wider than the Pearl, but it’s the smallest full-keyboard BlackBerry ever: 4.2 by 2.4 by 0.6 inches, which is shorter and thinner (but slightly wider) than the Palm Treo 700.
It’s nice that R.I.M. chose a cool name like the Curve, instead of calling its new machine the DCR-5700C or whatever. Still, Curve is a baffling name for this phone, which is no curvier than other BlackBerrys. Nor is R.I.M. throwing you a curve, as in “something totally unexpected”; the Curve is a pleasant and logical descendant of the Pearl. It even has the Pearl’s translucent central clickable trackball, which is so efficient a navigation tool that you forget all about the lack of a Treo-like touch screen.
Actually, several of the Curve’s components are improvements on its predecessor’s. The camera’s flash is much more powerful, and the photo resolution is now two megapixels (although the photos still look as if they came from a phone). You can run a new spelling checker before firing off an important message, although it doesn’t flag errors as you type them, as Word does. The volume increases automatically when you’re calling in a noisy place — an extremely obvious feature that ought to be on all phones.
The Curve’s biggest overhaul, however, has been in its multimedia features. New, attractive, graceful software is in place for playing music and showing photos and videos. You can install a microSD memory card, too — a good thing, since the built-in 64 megabytes of storage hold precious few tunes. Weirdly, you have to remove the battery to get at it.
A new piece of Windows software lets you set up a “watched” folder on your PC desktop; any videos or photos dumped into it are converted into a format that the BlackBerry likes — and are copied over to it.
Better yet, the Curve is one of the first cellphones to offer Bluetooth stereo music playback. That is, it can transmit music from your pocket, wirelessly, to a pair of lightweight Bluetooth headphones; the sound is fantastic. Some of these headsets even have microphones for making calls; when a call comes in, the music pauses automatically until you hang up.
If that all sounds a little bit too 2012 for your tastes, here’s a less radical feature: this phone has a 3.5-millimeter headphone jack. That’s the same audio jack that’s on the iPod and every other music player in existence. On the BlackBerry, it means that you can listen to music with any headphones you like.
This, too, may sound like an obvious feature, until you realize that the earphone jack on 99.99 percent of cellphones is a 2.5-millimeter jack, too small for standard headphones. (The Curve comes with wired stereo earbuds that have a microphone on the cord.)
That’s really the whole Curve story: smaller, lighter, masterly at multimedia.
The rest is pure, traditional, delightful BlackBerry. Efficiency nuts in particular will lap up the ingenious keyboard shortcuts. For example, you can press the I and O keys for “zoom in” and “zoom out” (when viewing photos); N and P stand for “next” and “previous,” T and B for “top” and “bottom,” and so on. In e-mail addresses, you can tap the Space bar to produce the @ sign instead of hunting for a special symbol. The BlackBerry puts in apostrophes automatically in “wont,” “dont,” “Im” and so on, and auto-capitalizes sentences.
There’s also a simple Ringer Off switch on the top, a screamingly obvious feature that is, bizarrely, a rarity on cellphones.
You can charge the phone with a U.S.B. cable attached to your laptop. And the e-mail program can open Word, Excel, PowerPoint, WordPerfect, PDF, JPEG and GIF attachments, which is very cool indeed.
This is a G.S.M. phone, meaning that it works in most other countries (for an additional fee, of course). It works as a speakerphone; you can dial by voice; you can assign speed-dial numbers to any key; and the ring tones are rich and polyphonic.
Unfortunately, the Curve also inherits some of the Pearl’s downsides. It can’t capture video at all. And despite the full keyboard, AT&T’s Curve can’t get onto any of the popular chat networks like AIM, MSN or Yahoo — only Google Talk and BlackBerry’s own proprietary network.
More appalling to the techie set is that while the BlackBerry’s Web browser is nicely designed (and saves you from having to type “http://www” each time), it’s slow; you wait about 10 seconds for the text of a Web page to appear, and 15 more for the graphics. That’s because this phone can connect only to Cingular/AT&T’s sleepy old Edge network, and not to the much faster one that’s already available in several big cities. There’s no Wi-Fi wireless, either.
Finally, of course, there’s the little matter of the network itself; Cingular/AT&T’s cellular coverage is not what you’d call universal. The Curve’s audio quality is fine — but only when a decent signal is available.
Still, only a curmudgeon would focus on those nits. This BlackBerry is a great phone (four hours of talk time, 17 days of standby); a fast, comfortable, responsive e-mail terminal; and a surprisingly full-fledged multimedia machine. With its super-intelligent software design, it blows away all those awkward Windows Mobile phones, like the Motorola Q and the Samsung BlackJack, and presents a tantalizing alternative to the Treo. (The choice of smartphone won’t become any easier in June, when Apple’s even slimmer iPhone is introduced with gigabytes of storage, a complete iPod system and a huge full-length screen — but no physical typing keys.)
All of this is good news. Because even if you can’t upgrade the components you were born with, it’s easy enough to improve upon the ones you buy.
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Get Your Free Net Phone Calls Here
The price of home phone service has dropped 30 percent since 1999. Surely, say the analysts, that trend line will eventually plummet all the way to zero. Surely, thanks to the Internet’s ability to carry your voice, landline phone calls will soon be free.
Already, dozens of calling services promise to slash your residential phone bill by exploiting the Internet. And yet nobody has yet delivered the holy grail: free calling, to any phone number, from your regular telephone. There’s always a catch.
For example, programs like Skype offer unlimited free calls — but not from your phone. You and your conversation partner have to sit at your computers wearing headsets, like nerds.
Then there are those annoyingly named VoIP services (voice over Internet protocol), like Vonage. You plug both your broadband Internet modem and your existing phone handset into an adapter box. Presto: unlimited domestic calls from your regular phone.
But they’re not free. You pay about $25 a month, and you hope that your VoIP company won’t suddenly go under, as SunRocket did last month.
If you’re still forking over $60 or $70 a month for residential phone service, here’s a guide to some newer Internet-calling options.
iCall.com. The promise: Free calls to domestic phone numbers.
The catch: Your friends pick up their phones to answer, but you still have to sit at your computer. In other words, iCall removes only half the drawbacks of Skype.
People can also call you from their phones (iCall assigns you a number, with an extension). But here again, you have to take calls at your computer, not your phone.
Jajah.com. The promise: Unlimited free calls to anyone else who’s signed up for a free Jajah account in the United States, Canada or 35 other countries. You use your regular phone. There’s no special equipment, contract, monthly fees or prepayment.
The catch: You don’t talk on your computer — but you need a Web browser to initiate calls. You begin at jajah.com — or, if you have a Treo, BlackBerry or iPhone, at mobile.jajah.com. There, you type in both your phone number and the one you’re calling.
In about 10 seconds, weird as this sounds, your phone rings: the Jajah Web site has called both of you, connecting the call from the middle. It works reliably and the voice quality is good, but having to place calls from a Web site is a hassle.
The “free calls to Jajah members” part gets a little complicated, too. The calls are free to both landlines and cellphones in the United States and Canada, but calls to overseas members are free only to landlines, and then only in 35 countries (in Europe, parts of South America, plus Australia, Israel, Japan and Taiwan and others).
When you’re not calling a Jajah member, overseas calls can be very cheap: how’s 3 cents a minute to England or China?
Calls to some other countries can still hurt, though. Afghanistan is 26 cents a minute. Greenland, 50 cents. Cuba — gulp — 86 cents.
And those are landline prices. Calls to overseas cellphones often cost five, six or seven times as much. That’s too bad, considering how many people outside the United States use only cellphones.
T-Mobile. Its new HotSpot@Home cellphones make unlimited free calls whenever you’re in a wireless hot spot — or when you’re at home, since a free home Wi-Fi router comes with the deal. Calls you place to numbers in the United States from overseas hot spots are free, too.
The catch: Your voice plan costs an additional $10 a month. Only two bare-bones phone models are available for this program, although more are on the way.
The free calls are available only in hot spots that don’t require a login in a Web browser. (The exceptions: Calls are free from any of T-Mobile’s 8,500 commercial hot spots in the United States — coffee shops and so on.)
PhoneGnome. This gets complicated, so read slowly.
PhoneGnome offers three ways to make free calls through the Internet, all of which should now sound familiar. One works just like Jajah (type in your number and the other person’s, and both your phones ring). The second method works just like Skype (wear a headset at your computer).
And the third is like VoIP: you buy a box ($100) that plugs into both your phone and your broadband modem. The PhoneGnome box, though, entails no monthly fees; you pick up your phone, cordless or not, and dial. If you’re calling someone who uses any of the three PhoneGnome plans, the call is free.
The catch: Calls to non-PhoneGnome members aren’t free. The plans are cheap: for example, $15 for unlimited domestic calls, or $6 a month for unlimited calls to your favorite 10 numbers. A recording tells you, each time you dial, whether the call will be free. But over all, PhoneGnome’s various permutations are not for the easily befuddled.
(Geek note: The PhoneGnome box is a user-friendly version of the Linksys SPA3000, beloved by techie types.)
Ooma. This September, you’ll be able to buy an Ooma box for $400. (The price will be $600 next year.) Then you can make all free calls to numbers in the United States, all the time, from your phone, without paying anything to anyone.
The Ooma box, which looks like a classy little desktop intercom, plugs into both your broadband modem and your telephone. If you have other phone extensions, you can equip each with a $40 minibox.
From then on, you just pick up the phone and dial, free and unlimited. Better yet, the Ooma box gives you a free second line (though not a second phone number). If you’re on one call when another comes in, the other phones in your house ring so someone else can answer. (You hear the traditional call-waiting beep in your ear.) Or someone else in the house can lift another receiver to place a second call.
The box also serves as an answering machine; in fact, through the box’s speakerphone, you can hear messages as they’re being left. You can also check your messages on a Web site.
The Ooma system is diabolically clever — and crazily ambitious. It exploits the practice in this country that local calls (usually within a 12-mile radius) are always free, even with basic phone service. When you call long-distance, your Ooma box connects over the Internet to another Ooma box in the destination city belonging to a total stranger. That person is never aware of it and neither are you, but that Ooma box places a landline call for the final, local leg of the call. Behind the scenes, in other words, Ooma relies on a vast peer-to-peer network.
Ooma says it needs only 1,500 boxes in place to cover 95 percent of the population in the United States — which is why it’s giving away that many boxes this summer (by invitation only).
The catch: The Ooma scheme relies on people who retain basic phone service, which, with taxes and fees, costs $24 to $28 a month these days. If you keep your home line, you keep the traditional 911 emergency service, for example, and you have a backup system if the power goes out. (Of course, a cellphone presumably serves the same purposes.)
If you cancel your home phone service entirely, Ooma still works, but you’ll be issued a new phone number by Ooma.
Ooma calls exhibit a fractional-second delay, much as cellphone calls and VoIP calls often do. It doesn’t stop you from getting your message across, but it can throw off your comic timing.
Finally, if Ooma goes out of business, the whole house of cards collapses. All of those $400 boxes stop working. Fortunately, if you have a $60 monthly phone bill now, you’ll have recouped your Ooma expenditure in seven months. Besides, Ooma has $27 million in venture capital, not to mention the actor, Ashton Kutcher, as the company’s creative director. (Ashton Kutcher? How could anything possibly go wrong?)
Of all of these approaches to free Internet calling, T-Mobile, Jajah and Ooma come the closest to delivering the holy grail: free calling, to any phone number, from regular phones. Even they are not entirely without drawbacks — but they’re certainly enough to keep phone company executives awake at night.
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Even in a Virtual World, ‘Stuff’ Matters
IT’S payday for Janine Hawkins. Not in the real world, where she is a student at Nipissing University in Ontario, but in the online world of Second Life, where she is managing editor of the fashion magazine Second Style.
Ms. Hawkins, who in Second Life takes on the persona of Iris Ophelia, a beauty with flowing hair and flawless skin, keeps a list of things she wants to buy: the latest outfits from the virtual fashion mecca Last Call, a new hairstyle from a Japanese designer, slouchy boots. When she receives her monthly salary in Linden dollars, the currency of Second Life, she spends up to four hours shopping, clicking and buying. After a year and a half, she owns 31,540 items.
Living it up in Second Life is a break from Ms. Hawkins’s part-time job as a French translator, but she works just as hard in the virtual world.
Last month, she earned 40,000 Linden dollars ($150), for interviewing designers, arranging fashion shoots and writing about trends in Second Life, called SL by frequent users. “I usually spend what I earn,” Ms. Hawkins said. “It’s entertaining.”
It also says a lot about the real world, especially when it comes to earning and spending money.
When people are given the opportunity to create a fantasy world, they can and do defy the laws of gravity (you can fly in Second Life), but not of economics or human nature. Players in this digital, global game don’t have to work, but many do. They don’t need to change clothes, fix their hair, or buy and furnish a home, but many do. They don’t need to have drinks in their hands at the virtual bar, but they buy cocktails anyway, just to look right, to feel comfortable.
Second Life residents find ways to make money so they can spend it to do things, look impressive, and get more stuff, even if it’s made only of pixels. In a place where people should never have to clean out their closets, some end up devoting hours to organizing their things, purging, even holding yard sales.
“Why can’t we break away from a consumerist, appearance-oriented culture?” said Nick Yee, who has studied the sociology of virtual worlds and recently received a doctorate in communication from Stanford. “What does Second Life say about us, that we trade our consumerist-oriented culture for one that’s even worse?”
Second Life, a three-dimensional world built by hundreds of thousands of users over the Internet, is also being used for education, meetings, marketing and more obvious game playing. It’s a wide world with a lot going on, in multiple languages, and it can be real-life enhancing for populations who are isolated for physical, mental, or geographic reasons. But as a petri dish for examining what makes many of us tick, Second Life reveals just how deep-seated the drive is to fit in, look good and get ahead in a material world.
Many residents have lived the American dream in Second Life, and built Linden-dollar fortunes through entrepreneurship. In what could have been an ideal world, however, or one where anyone could be a Harry Potter, Second Life has an up-and-down economy, mortgage payments, risky investments, land barons, evictions, designer rip-offs, scams and squatters. Not to mention peer pressure.
“Second Life is about getting the better clothes and the bigger build and the reputation as a better builder,” said Julian Dibbell, author of “Play Money,” which chronicles his year of trying to make a living by trading virtual goods in online games. “The basic activity is still the keeping up with the Joneses, or getting ahead of the Joneses, rat race game.”
TO have a Second Life, one needs a computer, the Second Life software, and a high-speed Internet connection. You use a credit card to buy Lindens, and Lindens earned during the game can be converted back into dollars via online currency exchanges. Players start by choosing one of the standard characters, called an avatar, and can roam the world by flying or “teleporting” (click and go). Nobody can go hungry, there is no actual need for warmer clothes or shelter, and there is much to do without buying Lindens.
But walking around in a standard avatar, when there are so many ways to buy a better appearance, is like showing up for the first day of school dressed differently than all the other kids. You stick out as different, as an SL “newbie.”
“It’s hard not to fall into that,” Mr. Yee said. “There are shops everywhere, so it’s easy to say, ‘Oh, O.K., I guess I’ll get a better pair of jeans.’ ”
Second Life was started in 2003 by a Silicon Valley techie inspired by a sci-fi novel, “Snow Crash.” It is owned by a private company called Linden Lab. The original idea of the game was to unleash creativity. Residents don’t have to wear the latest fashions; they don’t have to look — or act — human at all. They can take any animal, robotic, or inanimate form they want.
And while there is a minority population of animal characters, and wearing butterfly wings is currently in vogue for humans, for the most part the population is young women bursting from their blouses and young men bulging with muscle. (Underneath the clothes are cyber genitalia, sold separately. Mark Wallace, a blogger who writes about Second Life, explained that the parts are not fashion accessories but rather “a functional appliance” for, ahem, entertainment purposes.)
While a frequent criticism of Second Life is that spaces are often empty and that there’s “nothing to do,” a crowd can be found at the mall, just as it can in suburbia. For example, the Xcite! store, which sells body parts, is “always crawling with avatars,” said Mr. Wallace, co-author of a forthcoming book, “The Second Life Herald.” Fashion is big business in Second Life, along with entertainment and land development.
Big corporations like Toyota have set up islands in Second Life for marketing. Calvin Klein came up with a virtual perfume. Kraft set up a grocery store featuring its new products. But those destinations are not popular.
“These brands that have this real-world cachet are meaningless in Second Life, so most are ignored,” said Wagner James Au, who blogs and writes books about Second Life. “Just showing up and announcing ‘We’re Calvin Klein’ isn’t going to get you anywhere.” American Apparel closed its virtual clothing shop, and Wells Fargo abandoned the island it had set up to teach about personal finance.
Second Life exclusives do exist: A magic wand was a hot item at one point, and the sex bed is currently in demand. (“If you lie on it with more than one avatar, it’s like you’re in a porn movie,” Mr. Au explained.)
But the more mundane items are what really drive the economy: clothes, gadgetry, night life, real estate. “People buy these huge McMansions in Second Life that are just as ugly as any McMansions in real life, because to them that is what’s status-y,” Mr. Wallace said. “It’s not as easy as we think to let our imaginations run wild, in Second Life or in real life.”
Mitch Ratcliffe, an entrepreneur and blogger, was an early resident of Second Life and built a house with a lake. But he was soon disillusioned with the upkeep involved with owning the property. “I don’t see why I would want my second life to be about the same striving and profit that my first is,” Mr. Ratcliffe wrote in a blog entry about his Second Life adventures. He eventually reincarnated himself as Homeless Hermes.
“People come by, see the user name and tell me how sorry they are that I don’t have a home. Why?” he wrote. “It’s very middle class, very staid in the way economic stigma is attached to a failure to get to work.” In the meantime, Homeless Hermes took up buying and selling virtual land and has pocketed the equivalent of $800.
Land is the biggest-ticket item in Second Life, with Linden Lab selling islands for $1,675, plus a $295-a-month maintenance charge.) Catherine A. Fitzpatrick, a Russian translator in New York who in Second Life is a landlord known as Prokofy Neva, got into the game three years ago and now owns hundreds of apartment buildings, houses and stores that she rents out to about 1,500 tenants who pay from $1.50 a month to $150 a month. She takes several hundred dollars a month out of the game to pay real-world bills. Prokofy Neva herself does not have a house. “If I did, I would rent it out,” she said. “Why not make money from it?”
She has, however, turned over virtual acreage for a land preserve and public use. She and an architect friend were initially entranced by the idea of creating artistic homes that could defy gravity, but they discovered that there wasn’t demand for that in Second Life.
“The average person wants a ranch house or a beach house,” she said. “They don’t want even Frank Lloyd Wright.” (She added, “These people are my customers, so I respect that.”)
Some residents do wear grunge clothing — itself a status symbol in Second Life because of the difficulty of replicating ripped and stained clothing digitally. But the largest slice of the population follows the crowd, and the crowd is not dressing up as dragons.
“The money is in the real-looking stuff: making skins with red lips and smoky eyes, and stiletto boots,” said Ms. Hawkins, the Second Life fashion writer. First comes something popular, then the knockoffs. Soon everyone has one. “People go for similar looks and similar things,” she said.
In Ms. Hawkins’s online closet are avatars that let her move around as a rubber ducky or as a fruit salad encased in gelatin. But those identities are novelty items that usually stay on the shelf. When she goes out in virtual public, Ms. Hawkins usually takes the form of Ms. Ophelia, who has more than 250 pairs of shoes.
Items are real-world cheap — an outfit usually costs $2 to $5 — but they can add up quickly. “It’s so easy to buy something, you don’t realize how much you’re spending,” said Carrie Mandel, a homemaker and mother in Chicago who spends two work days a week as well as evenings and weekends on her Second Life business, selling pets.
One coveted status symbol in Second Life is a souped-up muscle car called the Dominus Shadow. It currently costs 2,368 Linden dollars, about $9 at the current rate of 268 Linden per dollar. Many players pay that much every month for premium membership that lets them own land, and all are sitting at computers with high-speed Internet access. So why don’t more people treat themselves to the prized possession of a Dominus?
“It’s expensive in-world,” said Daniel Terdiman, author of the forthcoming book “Entrepreneur’s Guide to Second Life.” “You don’t think of how much things cost in real dollars; you think in Linden dollars. When something is expensive, even though it comes out to a few dollars, a lot of people don’t want to spend that much money.”
Although Linden dollars can be bought with a credit card, there is evidence that the in-world economy is self-sustaining, with many players compelled to earn a living in-world and live on a budget.
Surprisingly, many take on low-paying jobs. They work as nightclub bouncers, hostesses, sales clerks and exotic dancers for typical wages of 50 to 150 Linden dollars an hour, the equivalent of 19 to 56 cents. A recent classified ad stated: “I am looking for a good job in SL. I am sick of working off just tips.” This job seeker listed potential occupations as landscaper, personal assistant, actor, waitress and talent scout.
Second Life players are evidently discovering what inheritors have struggled with for generations: It’s not as much fun to spend money you haven’t earned. Apparently, despite the common lottery-winning fantasies, all play and no work is a dull game, after all.
“People don’t take jobs just for the money,” said Dan Siciliano, who teaches finance at Stanford Law School and has studied the economies of virtual worlds. “They do it to feel important and be rewarded.”
And to buy more things. “A lot of exotic dancers want to become models, so they can earn more money to buy more clothes,” Ms. Hawkins said.
It’s not just vanity that drives people to dress up in Second Life. It’s also seen as good for business. Ms. Fitzpatrick, the landlady, says she doesn’t really care about how her avatar looks. But she cares about what prospective tenants think. “I felt I had to go, finally, and buy the hair and the suit,” she said, “or my customers might think I’m too weird.”
Appearances count in Second Life’s financial world, too. Banks and stock exchanges are housed in huge, formal structures draped in marble and glass. “People in the banking industry wear shiny silver suits and are absurdly tall and have hired a couple people to walk behind them in black suits with ear bugs and shoulder holsters,” said Benjamin Duranske, a lawyer who blogs about legal issues related to the virtual world.
THE stock exchanges and banks in SL are imposing, but they are unregulated and unmonitored. Investors fed Linden dollars into savings accounts at Ginko Financial bank, hoping to earn the promised double-digit interest. Some did, but in July there was a run on the bank and panic spread as Ginko A.T.M.’s eventually stopped giving depositors their money back. The bank has since vanished. With no official law and order in Second Life, investors have little recourse.
Robert J. Bloomfield, a behavioral economist at Cornell University, studies investor behavior in the real world and recently became interested in how investors behave similarly in Second Life. “We know the little guy makes lots of dumb mistakes,” Professor Bloomfield said. “They tend to be overly impressed by the trappings of success. We see that magnified in Second Life.”
Some Second Life residents are calling for in-world regulatory agencies — the user-run Second Life Exchange Commission has just begun operating — and some expect real-world institutions to become involved as the Second Life population and economy expands. “It’s a horse race as to whether the I.R.S. or S.E.C. will start noticing first,” Mr. Duranske said.
