I recently passed my first birthday in Second Life, having entered into The Grid on November 20, 2006. Shortly after entering and figuring out the basics of getting around, I noted an interesting phenomenon for a world so creative: There were no capital markets. There were some banks, and some places that would lend you funds if you had land as collateral, but nowhere (that I could find) could you find a stock or a bond.
One year later, there are six stock exchanges, a myriad of banks, insurance companies, hedge funds, and a whole realm of new devices to support them. What a difference a year makes.
Friday, November 30, 2007
Goodbye to a SL media figurehead
As I mentioned at SLReports.net, I found out late last night that SLNN.com's Marvel Ousley had resigned from her position as Editorial Director of the Second Life News Network (SLNN).
I first met Marvel in February or March (not sure which) when she visited a sculpture-building competition which I had sponsored.
We struck a friendship that has lasted through my IPO at AVIX, through the original Sal Ackland accusations, through all the summer's financial drama, JTF's buyout of AVIX, Investor Allen's admissions and subsequent exit from SL, and beyond to this day.
What I can say about Marvel is she committed herself to something that so many SL news professionals (including me) and bloggers don't bother to worry about - AP Style journalism.
Through Marvel's tenure, SLNN prided itself in bringing Second Life something it had not seen before... real-world quality news coverage.
Second Life is like any online community. Bloggers devote time to talking about the platform but we rarely see any true journalists here. Marvel was the exception. I won't get into my opinionated view of Second Life journalism, but I will say that Marvel will be missed here in our community.
Marvel Ousley has been a friend to SL Reports and JT Financial for quite some time, and on behalf of both organizations I wish her well in all her future endeavors... RL and SL, both.
Xavier Mohr
I first met Marvel in February or March (not sure which) when she visited a sculpture-building competition which I had sponsored.
We struck a friendship that has lasted through my IPO at AVIX, through the original Sal Ackland accusations, through all the summer's financial drama, JTF's buyout of AVIX, Investor Allen's admissions and subsequent exit from SL, and beyond to this day.
What I can say about Marvel is she committed herself to something that so many SL news professionals (including me) and bloggers don't bother to worry about - AP Style journalism.
Through Marvel's tenure, SLNN prided itself in bringing Second Life something it had not seen before... real-world quality news coverage.
Second Life is like any online community. Bloggers devote time to talking about the platform but we rarely see any true journalists here. Marvel was the exception. I won't get into my opinionated view of Second Life journalism, but I will say that Marvel will be missed here in our community.
Marvel Ousley has been a friend to SL Reports and JT Financial for quite some time, and on behalf of both organizations I wish her well in all her future endeavors... RL and SL, both.
Xavier Mohr
Wednesday, November 28, 2007
New Blogger
Today I was invited by Guardian Market to this blog. I hope to bring a different and interesting perspective to the SL financial community. Glad to be here.
Tuesday, November 27, 2007
Why bank in SL?
As often happens to me when I'm poking along on the SLCapEx forums, I came across a thread with a good question. The question is simple enough, and is the title of the thread: "Why should I put my money in an SL bank?"
At first brush, this may seem to be a simple and scared n00b asking a question because they're scared. However, ultimately this is a question that every investor has to answer: Why trust your Lindens anywhere outside your avatar?
When you put your money outside of your own control, you're exposing yourself to the risk of loss for a variety of reasons. There are the multitude of frauds that can and have occurred in Second Life, but also there's the genuine chance that the security you've chosen will simply fail to be successful. For this risk, you demand payment, which usually comes in the form of interest, dividends, or capital growth, depending on your preferences. How much growth is enough to make your Linden dollars stray from your pocket is up to you and your own private discussion with utility curves.
I'd like to bring something completely from left field into this discussion however: game theory. I've just recently gotten into the most basic concepts of game theory, and I'm loving every minute of it. Specifically, I'd like to call to mind a simple game called a "trust game."
Here's the gist of how a trust game works: You are given an initial allocation of $X. (Almost always, this is real money - if you ever have a chance to volunteer for a game theory experiment, do it! You'll probably get lunch money out of it.) You are then given a choice to pass an amount T to another player, T>=0. This amount T, once under control of the other player, earns a rate of return r, r>1 (usually r is 1 or 2, in the games I've read about). Then, the other person gets to divide the amount they now control, which is T * (1 + r), between you and themselves however they choose. There are no restrictions on how that money they now control is to be divided. That's why it's called a trust game. (If any of you are really interested, you can find an instructor's script for a trust game here.)
For the less math-oriented, let's do a quick numerical example. You sit down and someone hands you $10. You can then choose to give any part of that to me that you wish, with the understanding that it will triple as soon as you hand it to me and then I can divide it between us however I choose. You choose (as an example) to give me $5, which then becomes $15, and I, being grateful, choose to return $7 to you. You get $12 and I walk away with $8.
Here's the interesting thing, though: there has been at least one study done which links trust (as a culture) to wealth. (Apologies for the link not going directly to the paper - the paper costs money to get to, as near as I can tell.) The concept is simple enough: the more risk you take, the more return you get, and therefore the richer you become. I'm not well enough versed in the topic to attempt to argue it as this paper has done, but you get the idea: risk begets reward.
So, does this work in Second Life? Time will tell. Certainly blind trust will just get your Lindens stolen, as many lemmings have proven. However, well-placed trust could be the secret of success behind some of Second Life's most well-known names. That is a bit of mind candy I leave for you to chew on.
At first brush, this may seem to be a simple and scared n00b asking a question because they're scared. However, ultimately this is a question that every investor has to answer: Why trust your Lindens anywhere outside your avatar?
When you put your money outside of your own control, you're exposing yourself to the risk of loss for a variety of reasons. There are the multitude of frauds that can and have occurred in Second Life, but also there's the genuine chance that the security you've chosen will simply fail to be successful. For this risk, you demand payment, which usually comes in the form of interest, dividends, or capital growth, depending on your preferences. How much growth is enough to make your Linden dollars stray from your pocket is up to you and your own private discussion with utility curves.
I'd like to bring something completely from left field into this discussion however: game theory. I've just recently gotten into the most basic concepts of game theory, and I'm loving every minute of it. Specifically, I'd like to call to mind a simple game called a "trust game."
Here's the gist of how a trust game works: You are given an initial allocation of $X. (Almost always, this is real money - if you ever have a chance to volunteer for a game theory experiment, do it! You'll probably get lunch money out of it.) You are then given a choice to pass an amount T to another player, T>=0. This amount T, once under control of the other player, earns a rate of return r, r>1 (usually r is 1 or 2, in the games I've read about). Then, the other person gets to divide the amount they now control, which is T * (1 + r), between you and themselves however they choose. There are no restrictions on how that money they now control is to be divided. That's why it's called a trust game. (If any of you are really interested, you can find an instructor's script for a trust game here.)
For the less math-oriented, let's do a quick numerical example. You sit down and someone hands you $10. You can then choose to give any part of that to me that you wish, with the understanding that it will triple as soon as you hand it to me and then I can divide it between us however I choose. You choose (as an example) to give me $5, which then becomes $15, and I, being grateful, choose to return $7 to you. You get $12 and I walk away with $8.
Here's the interesting thing, though: there has been at least one study done which links trust (as a culture) to wealth. (Apologies for the link not going directly to the paper - the paper costs money to get to, as near as I can tell.) The concept is simple enough: the more risk you take, the more return you get, and therefore the richer you become. I'm not well enough versed in the topic to attempt to argue it as this paper has done, but you get the idea: risk begets reward.
So, does this work in Second Life? Time will tell. Certainly blind trust will just get your Lindens stolen, as many lemmings have proven. However, well-placed trust could be the secret of success behind some of Second Life's most well-known names. That is a bit of mind candy I leave for you to chew on.
Still Looking
I'm still looking for additional authors for Second Chaos, by the way. If interested, send me a coherent message in English, and you'll likely get an invite. You can write about whatever you like, but I think that by banding together with several different authors, we'll have more readership than individual blogs. Come on, it'll be fun!
Still Around
Quick note... I'm still around. Fell behind on some RL and SLR stuff and haven't had much time period. Hopefully I will be able to blog some more tonight or tomorrow.
Take Care,
Xav
Take Care,
Xav
Sunday, November 25, 2007
Windlight
There isn't much in Second Life that just leaves me with my jaw hanging open. Windlight did it. Go download the first look viewer and give it a try - you won't be disappointed.
If you doubt my words, check out some of the other reactions to Windlight:
Chino Ray
Maple.nu
Vint Falken
If you doubt my words, check out some of the other reactions to Windlight:
Chino Ray
Maple.nu
Vint Falken
Saturday, November 24, 2007
Lessons in FM: Part I - Present Value
I'm going to start a series of educational posts about the basic concepts of Financial Mathematics, my major. These are not intended to be overly complex and I will do my best to keep the calculus out of it. There will be a mix of mathematics and economics, and the symbols used will likely be actuarial in nature. This convention won't bother those who are new to the topic, but might if you have some familiarity with it already from another discipline, like Finance.
Present value tells you the value of some amount at one point in time at another point in time. Usually, you're trying to bring payments at some future time back and find out what they're worth today. To find this, you need the future value(s) of payments (FV), the interest rate (i), and the times at which these payments will be made (t or tk). We'll work with just one payment for now, and we'll also be using compound interest.
The equation we start with is pretty basic:
Present Value * Interest = Future Value
in symbols,
PV * (1+i)t = FV
To solve for PV, we divide both sides by (i+i)^t. However, remember that actuarial notation I mentioned? Actuaries use this method (dividing by the interest factor) so often that they have their own symbol for it, v ("vee").
Definition: v = 1 / (1 + i)
Using this notation, we solve for PV and get
PV = FV * vt
And that's it! Just plug your numbers in after that! So long as you have three of the variables, you can solve for the fourth.
So that's great and all, Guardian, but what if I have more than one payment? Well, fortunately, you can just add them up. Say you have two payments - one at time t = 1 and the other at time t = 3. To find what they're worth today, just add them. You get
PV1 = FV1*v1
PV3 = FV3*v3
PV1 + PV3 = PVtotal = FV1*v1 + FV3*v3
The tricky thing is finding the interest rate which makes that equation balance. This is a problem that often has no direct solution and must be done iteratively using numerical methods. That's part of that scary math I promised I wouldn't get into. (As an aside, if people really want to see that mathematics, comment that you do and I'll whip something up.)
So what good does this do in the Second Life capital markets? Well, theoretically (and in Second Life, I mean very theoretically), that is what all the stock prices are based on. Investors value securities according to what they think the future value of it is, discounted with interest (this interest rate likely has a risk premium built into it, however). Whether that future value is based off of reselling the security, dividend payments, or both is something that each investor must decide for themselves. However, if you know your own preferences and you can make guesses as to the dividend amounts and/or stock prices, you can use this method to value what "your" price of the securities is and whether or not it's a good buy for you.
So what if there are a lot of payments, but they occur in regular intervals? I'll tackle that one in Part II.
Present value tells you the value of some amount at one point in time at another point in time. Usually, you're trying to bring payments at some future time back and find out what they're worth today. To find this, you need the future value(s) of payments (FV), the interest rate (i), and the times at which these payments will be made (t or tk). We'll work with just one payment for now, and we'll also be using compound interest.
The equation we start with is pretty basic:
Present Value * Interest = Future Value
in symbols,
PV * (1+i)t = FV
To solve for PV, we divide both sides by (i+i)^t. However, remember that actuarial notation I mentioned? Actuaries use this method (dividing by the interest factor) so often that they have their own symbol for it, v ("vee").
Definition: v = 1 / (1 + i)
Using this notation, we solve for PV and get
PV = FV * vt
And that's it! Just plug your numbers in after that! So long as you have three of the variables, you can solve for the fourth.
So that's great and all, Guardian, but what if I have more than one payment? Well, fortunately, you can just add them up. Say you have two payments - one at time t = 1 and the other at time t = 3. To find what they're worth today, just add them. You get
PV1 = FV1*v1
PV3 = FV3*v3
PV1 + PV3 = PVtotal = FV1*v1 + FV3*v3
The tricky thing is finding the interest rate which makes that equation balance. This is a problem that often has no direct solution and must be done iteratively using numerical methods. That's part of that scary math I promised I wouldn't get into. (As an aside, if people really want to see that mathematics, comment that you do and I'll whip something up.)
So what good does this do in the Second Life capital markets? Well, theoretically (and in Second Life, I mean very theoretically), that is what all the stock prices are based on. Investors value securities according to what they think the future value of it is, discounted with interest (this interest rate likely has a risk premium built into it, however). Whether that future value is based off of reselling the security, dividend payments, or both is something that each investor must decide for themselves. However, if you know your own preferences and you can make guesses as to the dividend amounts and/or stock prices, you can use this method to value what "your" price of the securities is and whether or not it's a good buy for you.
So what if there are a lot of payments, but they occur in regular intervals? I'll tackle that one in Part II.
Visibility
I'm trying to increase visibility of Second Chaos through claiming it with Technorati, and they make you confirm your blog via a post. That's all this is.
Technorati Profile
Technorati Profile
Friday, November 23, 2007
Thinking
As my friend and fellow author here on Second Chaos Xavier Mohr posted yesterday, he is resigning as CEO of SL Reports. Xavier, I wish you the best and commend you for doing your best to find an honorable and smooth transition of power for the amazing website - a source of news of Second Life's business elite - that you have created.
Honestly, when Xavier posted that announcement I figured there would be the usual reactions: panic-selling, name calling, well-wishing, and day trading. However, one reaction that caught me off guard was found in this thread on the SLR portion of the SLCapEx forums. Bogart Beck wrote, "As to the future prospects of SLR, we both know that there are several great writers in and around our SL CapEx neighborhood - perhaps a candidate like Guardian Market would consider carrying the torch forward as the new SLR CEO. I'm confident you and Arbitrage will recruit an awesome replacement."
This was not something I was expecting. I suppose it's the closest thing you can get to being recommended for a company. The rest of this post will probably not be short, nor will it be the most organized (it's 7:30am here and for some reason this is on my mind), but it will be my thoughts, considerations, and hesitations of Bogart's comment.
Second Life has always been a fancy game to me. I know that many in-world have strong feelings about what Second Life is, but ultimately it's a world created by residents, supported by Linden Labs. It is not a second reality, although maybe Linden Labs would like it to be that way. In short, it's a nice place to visit, but I wouldn't want to live there.
Back in the early days of 2007 I got involved in helping out with the World Stock Exchange (back when it was the only one) and it nearly consumed me. I had days where I stayed up until 2am (a rare thing for me, even in college as I was at that time - I've since graduated) and even once until 4:30am to help out. It began to affect my relationship with my friends, my girlfriend, and my coursework. Fortunately, I resigned from the task I had taken on before it caused serious harm.
I don't want that to happen again. SLR is a great company, and I've always thought that managing a web business would be a great thing to try to my hand at. I'm not the best coder or the best writer, but I have some experience in both and a nice collection of friends in-world. Plus I've seen how the best CEOs run their show, and I have some experience in financial matters as well. All of this I feel could combine very well to make an excellent leader for SLR.
However, I will not sacrifice my First Life for Second Life. Second Life < First Life. Note that I did not use less than or equal to (<=) but strictly less than. I have a degree in mathematics and am fully aware of the implications this can bring.
Another hesitation I have has to deal with SLCapEx's policy of RL CEO identity verification. Please read the SLCapEx disclosure. I don't care if you've read it before, please, just read it one more time. Now that you've read it, please explain to me why a "FICTITIOUS STOCK MARKET SIMULATION" that uses Linden Dollars which "IS NOT LEGAL TENDER IN OUR VIEW" would possibly need my real life identity? What possible need could something that is "operating SOLELY as an Element to an online GAME" and "is NOT a REAL WORLD SECURITIES ENTITY and does NOT offer ANY opportunity for REAL WORLD PROFITS or INVESTMENT" have for my identity? It makes no sense. (By the way, that was their capitalization, not mine...but you already knew that, because you already read the disclaimer ;-) - I told you this would be unorganized.)
Not only does this not make sense, but it's a danger to me. I don't know any experts in the field of identity theft, but I can't even imagine explaining how I had my identity stolen if something were to happen to SLCapEx's ID vault, wherever they keep it. I think that explanation would make me seem like a total moron for giving out the type of ID they request (a faxed copy of your driver's license, last I heard) to someone that didn't need it, who I met over the internet, and who openly disclosed that the were part of a game. I tend to reveal the least amount of information possible to do something (told you I was a math major...) and this is definitely overkill in my opinion. If any SLCapEx authorities are reading at this point, I'd love to know their comments on this matter. (I exempt ACE from this requirement because they take the position that SL businesses are basically RL businesses, and so they have a valid reason for wanting RL ID. However, SLCapEx does not, so as Ricky Ricardo would say, they got some 'splainin' to do.)
I think that's enough of a rant for now. I'm still very much considering the CEO position. My negative comments are simply the challenges I must overcome or come to terms with in order to fully enjoy the role I would take. I want to reemphasize that I think it would be a very rewarding experience, and I think I could do well at it. Also, I hope I have enough readers to this blog to give me some feedback. I'll be posting on the comments as well, so let's talk!
Honestly, when Xavier posted that announcement I figured there would be the usual reactions: panic-selling, name calling, well-wishing, and day trading. However, one reaction that caught me off guard was found in this thread on the SLR portion of the SLCapEx forums. Bogart Beck wrote, "As to the future prospects of SLR, we both know that there are several great writers in and around our SL CapEx neighborhood - perhaps a candidate like Guardian Market would consider carrying the torch forward as the new SLR CEO. I'm confident you and Arbitrage will recruit an awesome replacement."
This was not something I was expecting. I suppose it's the closest thing you can get to being recommended for a company. The rest of this post will probably not be short, nor will it be the most organized (it's 7:30am here and for some reason this is on my mind), but it will be my thoughts, considerations, and hesitations of Bogart's comment.
Second Life has always been a fancy game to me. I know that many in-world have strong feelings about what Second Life is, but ultimately it's a world created by residents, supported by Linden Labs. It is not a second reality, although maybe Linden Labs would like it to be that way. In short, it's a nice place to visit, but I wouldn't want to live there.
Back in the early days of 2007 I got involved in helping out with the World Stock Exchange (back when it was the only one) and it nearly consumed me. I had days where I stayed up until 2am (a rare thing for me, even in college as I was at that time - I've since graduated) and even once until 4:30am to help out. It began to affect my relationship with my friends, my girlfriend, and my coursework. Fortunately, I resigned from the task I had taken on before it caused serious harm.
I don't want that to happen again. SLR is a great company, and I've always thought that managing a web business would be a great thing to try to my hand at. I'm not the best coder or the best writer, but I have some experience in both and a nice collection of friends in-world. Plus I've seen how the best CEOs run their show, and I have some experience in financial matters as well. All of this I feel could combine very well to make an excellent leader for SLR.
However, I will not sacrifice my First Life for Second Life. Second Life < First Life. Note that I did not use less than or equal to (<=) but strictly less than. I have a degree in mathematics and am fully aware of the implications this can bring.
Another hesitation I have has to deal with SLCapEx's policy of RL CEO identity verification. Please read the SLCapEx disclosure. I don't care if you've read it before, please, just read it one more time. Now that you've read it, please explain to me why a "FICTITIOUS STOCK MARKET SIMULATION" that uses Linden Dollars which "IS NOT LEGAL TENDER IN OUR VIEW" would possibly need my real life identity? What possible need could something that is "operating SOLELY as an Element to an online GAME" and "is NOT a REAL WORLD SECURITIES ENTITY and does NOT offer ANY opportunity for REAL WORLD PROFITS or INVESTMENT" have for my identity? It makes no sense. (By the way, that was their capitalization, not mine...but you already knew that, because you already read the disclaimer ;-) - I told you this would be unorganized.)
Not only does this not make sense, but it's a danger to me. I don't know any experts in the field of identity theft, but I can't even imagine explaining how I had my identity stolen if something were to happen to SLCapEx's ID vault, wherever they keep it. I think that explanation would make me seem like a total moron for giving out the type of ID they request (a faxed copy of your driver's license, last I heard) to someone that didn't need it, who I met over the internet, and who openly disclosed that the were part of a game. I tend to reveal the least amount of information possible to do something (told you I was a math major...) and this is definitely overkill in my opinion. If any SLCapEx authorities are reading at this point, I'd love to know their comments on this matter. (I exempt ACE from this requirement because they take the position that SL businesses are basically RL businesses, and so they have a valid reason for wanting RL ID. However, SLCapEx does not, so as Ricky Ricardo would say, they got some 'splainin' to do.)
I think that's enough of a rant for now. I'm still very much considering the CEO position. My negative comments are simply the challenges I must overcome or come to terms with in order to fully enjoy the role I would take. I want to reemphasize that I think it would be a very rewarding experience, and I think I could do well at it. Also, I hope I have enough readers to this blog to give me some feedback. I'll be posting on the comments as well, so let's talk!
Wednesday, November 21, 2007
Big Promises
If you haven't read this post from Philip Linden, I would recommend doing so now. It certainly accentuates the hope that Linden Lab will someday fix all of the crashes, bugs, and frustrations that generally plague the world we call Second Life.
For my part, I think his words are encouraging but I still have my believe-it-when-I-see-it attitude. It's easy to make a big promise, but it's hard to deliver on it. Fortunately, I think Linden Labs finally has the resources (250 employees?!?) to do what they need to do, and they've certainly proven to the world that SL is a viable (and possibly profitable) world, which will bring investors if needed. That, and I have a guess as to what all the extra revenue from the mainland sales is being used for now. Let's hope it's worthwhile.
In other, more random news, I had my first Second Life birthday yesterday. I can't log in to check my profile right now, but I believe that I created my account on 11/20/2006. Happy birthday to me!
For my part, I think his words are encouraging but I still have my believe-it-when-I-see-it attitude. It's easy to make a big promise, but it's hard to deliver on it. Fortunately, I think Linden Labs finally has the resources (250 employees?!?) to do what they need to do, and they've certainly proven to the world that SL is a viable (and possibly profitable) world, which will bring investors if needed. That, and I have a guess as to what all the extra revenue from the mainland sales is being used for now. Let's hope it's worthwhile.
In other, more random news, I had my first Second Life birthday yesterday. I can't log in to check my profile right now, but I believe that I created my account on 11/20/2006. Happy birthday to me!
Tuesday, November 20, 2007
Design Tweaks
As you may have noticed, the design of Second Chaos is still being tweaked. I'm not the best at web design, especially with regard to browser compatibility, so if any of you open up this page to find it looking like a kindergartener's homework project or vomiting up random HTML, please let me know (particularly if you use something other than Firefox or IE).
I'm also still looking for writers, so if you know of anyone (or would like to jump on board yourself!) send me an IM/notecard/email/smoke signal (bonus points if you get that last one), and I'll get you set up.
For today's humor, please check out the argument between LNL's CEO Lindsay Druart and DGD's CEO Maelstrom Baphomet in the SLCapEx Forums.
I'm also still looking for writers, so if you know of anyone (or would like to jump on board yourself!) send me an IM/notecard/email/smoke signal (bonus points if you get that last one), and I'll get you set up.
For today's humor, please check out the argument between LNL's CEO Lindsay Druart and DGD's CEO Maelstrom Baphomet in the SLCapEx Forums.
Monday, November 19, 2007
Druart vs. SL Marketing: Ad Dispute in SL?
Well, just when you thought the Second Life Business Bureau (SLBB) had disappeared from the face of the grid, it looks like they're back in action settling a case between Lindsay Druart and SL Marketing.
- - - -
Part of the announcement made by Jon Desmoulins at the WSE website details Lindsay's claims:
- - - -
Normally I would overlook this as a simple dispute between a customer and a service provider and say nothing about it, but considering I have worked in advertising sales, production, web graphics, and related industries for many years now, I thought it might be interesting to comment on this.
From what I gather with no pre-existing knowledge of this subject, Lindsay Druart purchased three web banner packages from SL Marketing, but only one banner design was finalized and approved... the other two were incorrectly designed on the first proof and the SL Marketing designer refused to provide revised banners.
There are a couple problems I see on both sides here. First of all with SL Marketing... I find it amazing that they actually include banner design in their impression purchase price.
The reason I disagree with this is - especially with design - customers vary ACROSS THE BOARD! A super-complex banner design may be approved on the first proof with one customer, while a very simple banner design for another client may take six or seven proofs to get finalized. Some customers are very easy-going, some are very difficult. In short, banner production cost (at least in RL) varies for an advertising agency or publication depending on how difficult the customer is... because a designer is working a variable amount of time and putting in a variable amount of effort for each project.
At SL Reports and other real-life web businesses I always separated the costs for impression purchases and banner design. For instance I will sell 18,000 impressions of a small box banner on SL Reports for L$18,000. If you buy it, you either have to build the banner yourself or pay someone to do it... I don't care which one as long as it works and you send it to me, without me having to modify it in any way.
If you want me to do it, fine, but you get to pay for how complicated you are. Animated GIF ad production will cost you a separate L$5,000 and with that you get two proofs. If you want or need additional proofs, fine, but you're going to pay L$1,500 for each one.
You wouldn't imagine how well this process works in making a difficult customer an easy one!
In any event one of the problems we see with packaged ad space PLUS design sales is a lack of quality in banner production. Your designer is probably thinking, "I"m not going to spend five hours on something I am not being paid any extra for."
Another problem you see regularly is lack of communication from the customer. You have no idea how many people send a logo and a SLURL and THAT'S IT! (and half the time they forget the SLURL at that) LOL
So this is when you see happen what apparently happened once or twice in the LNL & SLM case, a creative designer has to come up with ad copy to fill the empty space. Now granted, many designers have a "I can word it better than you" attitude and change customers' ad text without asking... who knows what the case was here.
With advertising in particular, I advise advertising professionals and customers BOTH to demand a detailed concept and design session prior to production. Sit down (or in SL, IM or meet in-world) and discuss pixel by pixel how you think the banner should look, and what EXACTLY it should say. I would imagine if that happened in this case then it would never have gone before SLBB arbitration.
In any event, I am curious how this even GOT to the SLBB level. It seems to me... based on experience with every single ad I have designed or account I have sold... that SLM would have bit their lips, fixed the banners, and just shut the hell up so they could keep their money and build a longstanding relationship with a new client.
Does this come back to perhaps Lindsay made some off-color remark that pissed off the designer and led him or her to refuse to work on the account? Or is this simply a matter of the designer saying: "Look, you're being difficult, I'm not making enough money off of this, and I have better things to do... deal with it."
Who knows.
It seems like we had hard-headed people on both sides here, but I am leaning towards perhaps there being more fault on the end of SL Marketing. Advertising professionals need to anticipate that they will deal with situations like this every once in a while and do what is needed at that time to correct it. If it happens often, change your pricing structure... charge extra for design... do what is needed so that you don't lose the sale or end up having to issue a refund.
I have issues with the SLBB that I won't go into in this post, but I have to agree with their decision on this one. I'm glad Lindsay got her refund.
Communication in business is key. Looks like in this situation communication was lost somewhere in the design process.
I think we would all be curious to know what really happened.
Xavier Mohr
- - - -
Part of the announcement made by Jon Desmoulins at the WSE website details Lindsay's claims:
AS TO THE FACTS
After reviewing all the documentary evidence, consisting of two (2) transcripts. Further there are testimonies, given before the arbitrational board on Sunday, October 14th, 2007 by the Claimant and Defendant.
Below are the statements of fact and our findings:
On April 26, 2007, Ms. Druart purchased an advertising campaign from SL Marketing which included three (3) banners and a package of 390,000 impressions. Mr. Desmoulins and/or SL Marketing have agreed to refund the purchase price for the impressions and Ms. Druart concedes that she received one banner that was acceptable.
Thus, the matter before us includes Ms. Druart's claim that she is entitled to a refund for the two remaining banners, which she alleges were not prepared in accordance with her wishes and were usless.
RECONVENTION
Mr. Desmoulins and/or SL Marketing argues that it could not refund the funds because it had already paid a designer. However, Mr. Desmoulins admitted that the designer was in fact SL Marketing's employee.
Thus Ms. Druart's claim is properly against SL Marketing and not against the designer, where it otherwise might be had the designer been an independant contractor. This case is no different than an employer paying a simple wage to an employee, and does not justify passing the cost of errors resulting from miscommunications to the customer.
AS TO THE APPLICABLE LAW
Second Life® knows - only - the Terms Of Service (TOS) and Community Standards, made up by Linden Lab and/or Linden Research Inc.
No specific national law of any real life state is applicable to contracts, agreements and trading in Second Life®. Therefore international law, as stated in the UNIDROIT Conven-tions of The Hague - made by the International Institute for the Unification of Private Law - on the International Sale of Goods (July 1st, 1964) and on the Formation of Contracts for the International Sale of Goods (July 1st, 1964), must be used as a reference to how contracting parties in Second Life® should behave towards each other. The international law is to be applied by analogy. I recommend Linden Research Inc. and/or Linden Lab to incorporate rules and regulations about trade between parties in Second Life® in their Community Standards.
MOTIVATIONAL ASPECTS
The ruling could go in favor of Ms. Druart on several grounds, the most simple being that SL Marketing agreed to credit her the cost of the two contested banners for future use, thus assuming the costs it would take to create two banners for her in the future. Reason finds no refuge then in SL Marketing's denial of a refund should Ms. Druart believe it is simply in her best interest to receive that same value now in the form of a monetary refund and choose not to use SL Marketing in the future.
Mr. Desmoulins and/or SL Marketing argue that refunding was not possible, because a designer had already been paid. However, Mr. Desmoulins admitted that the designer was in fact SL Marketing's employee. Thus Ms. Druart's claim is properly against Mr. Desmoulins and/or SL Marketing, and not against the designer, where it otherwise might be had the designer been an independant contractor. This is no different than an employer paying a simple wage to an employee and does not justify passing the cost of errors resulting from miscommunications to the customer.
There appears to have been lots of miscommunications between Ms. Druart and Mr. Desmoulins and/or SL Marketing. Ms. Druart is no more responsible for those miscommunications then Mr. Desmoulins and/or SL Marketing. She is at fault for originally sending an incorrect logo, however, it appears that (employees of) SL Marketing took it upon itself to insert slogans into banners that were not approved by her, thus it should have redone work based upon its own errors, regardless of the incorrect logo.
Ms. Druart paid SL Marketing to perform a service. Mr. Desmoulins represents and is responsible for all liabilities of this company as its owner. Once SL Marketing found that it would have to redo some banners after frankly forging ahead and creating them without sufficient input from Ms. Druart, it appears that it simply chose to stop attempting.
- - - -
Normally I would overlook this as a simple dispute between a customer and a service provider and say nothing about it, but considering I have worked in advertising sales, production, web graphics, and related industries for many years now, I thought it might be interesting to comment on this.
From what I gather with no pre-existing knowledge of this subject, Lindsay Druart purchased three web banner packages from SL Marketing, but only one banner design was finalized and approved... the other two were incorrectly designed on the first proof and the SL Marketing designer refused to provide revised banners.
There are a couple problems I see on both sides here. First of all with SL Marketing... I find it amazing that they actually include banner design in their impression purchase price.
The reason I disagree with this is - especially with design - customers vary ACROSS THE BOARD! A super-complex banner design may be approved on the first proof with one customer, while a very simple banner design for another client may take six or seven proofs to get finalized. Some customers are very easy-going, some are very difficult. In short, banner production cost (at least in RL) varies for an advertising agency or publication depending on how difficult the customer is... because a designer is working a variable amount of time and putting in a variable amount of effort for each project.
At SL Reports and other real-life web businesses I always separated the costs for impression purchases and banner design. For instance I will sell 18,000 impressions of a small box banner on SL Reports for L$18,000. If you buy it, you either have to build the banner yourself or pay someone to do it... I don't care which one as long as it works and you send it to me, without me having to modify it in any way.
If you want me to do it, fine, but you get to pay for how complicated you are. Animated GIF ad production will cost you a separate L$5,000 and with that you get two proofs. If you want or need additional proofs, fine, but you're going to pay L$1,500 for each one.
You wouldn't imagine how well this process works in making a difficult customer an easy one!
In any event one of the problems we see with packaged ad space PLUS design sales is a lack of quality in banner production. Your designer is probably thinking, "I"m not going to spend five hours on something I am not being paid any extra for."
Another problem you see regularly is lack of communication from the customer. You have no idea how many people send a logo and a SLURL and THAT'S IT! (and half the time they forget the SLURL at that) LOL
So this is when you see happen what apparently happened once or twice in the LNL & SLM case, a creative designer has to come up with ad copy to fill the empty space. Now granted, many designers have a "I can word it better than you" attitude and change customers' ad text without asking... who knows what the case was here.
With advertising in particular, I advise advertising professionals and customers BOTH to demand a detailed concept and design session prior to production. Sit down (or in SL, IM or meet in-world) and discuss pixel by pixel how you think the banner should look, and what EXACTLY it should say. I would imagine if that happened in this case then it would never have gone before SLBB arbitration.
In any event, I am curious how this even GOT to the SLBB level. It seems to me... based on experience with every single ad I have designed or account I have sold... that SLM would have bit their lips, fixed the banners, and just shut the hell up so they could keep their money and build a longstanding relationship with a new client.
Does this come back to perhaps Lindsay made some off-color remark that pissed off the designer and led him or her to refuse to work on the account? Or is this simply a matter of the designer saying: "Look, you're being difficult, I'm not making enough money off of this, and I have better things to do... deal with it."
Who knows.
It seems like we had hard-headed people on both sides here, but I am leaning towards perhaps there being more fault on the end of SL Marketing. Advertising professionals need to anticipate that they will deal with situations like this every once in a while and do what is needed at that time to correct it. If it happens often, change your pricing structure... charge extra for design... do what is needed so that you don't lose the sale or end up having to issue a refund.
I have issues with the SLBB that I won't go into in this post, but I have to agree with their decision on this one. I'm glad Lindsay got her refund.
Communication in business is key. Looks like in this situation communication was lost somewhere in the design process.
I think we would all be curious to know what really happened.
Xavier Mohr
NOAA
From time to time we all need to take a break from the financial markets, and I have to pass along the SLURL of one of the coolest islands I've happened to visit: The National Oceanic and Atmospheric Association (NOAA) island.If you live in the United States, one thing probably jumps out at you when you hear the NOAA: hurricanes. These are the crazy guys who fly planes straight into hurricanes to measure their strength. However, on this island, you'll find a lot of very cool interactive exhibits to try out and you might even learn something.
Give it a click and poke around. My favorite exhibit is the tsunami exhibit, which I recommend going through at least twice - once just to see it, and once to explore it. The picture is of the live weather reporting exhibit, which through some miracle of scripting displays, with little cloud prims, live weather data from across the United States.
Happy exploring!
The power of the dragon
Should anyone (including himself) doubt Maelstrom Baphomet's influence over the markets, notice that about 90 seconds after this group announcement:
STRONG Sell Recommendation LNL
Minimize your risk. There is a serious risk of Insolvency in this situation if LL does not step in.
This was posted at SLCapEx:
LNL: Temporary Trading Halt
The system has temporarily suspended trading on LNL due to price fluctuation. Trading is scheduled to resume at next market open.
Note: I will not attempt to keep pace with the quickly developing news of the bank failures. I recommend viewing The Dragon's Bite for the most up-to-date info.
STRONG Sell Recommendation LNL
Minimize your risk. There is a serious risk of Insolvency in this situation if LL does not step in.
This was posted at SLCapEx:
LNL: Temporary Trading Halt
The system has temporarily suspended trading on LNL due to price fluctuation. Trading is scheduled to resume at next market open.
Note: I will not attempt to keep pace with the quickly developing news of the bank failures. I recommend viewing The Dragon's Bite for the most up-to-date info.
Sunday, November 18, 2007
JTF, CapEx, SLR, and Xavier Mohr
Well considering I cannot get to sleep right now, I figured it would be a great opportunity for me to test-drive Guardian Market's new Second Chaos blog.
I figured there's no better subject to start off with than my affiliations and perceived positions with JT Financial Bank, the SL Capital Exchange, and SL Reports (CapEx: SLR).
I receive the question time and again from random people if I have quit JTF and CapEx, if I have had some form of "falling-out" with the management and so forth. The answers to those respectively are "kind-of" and "no."
I do not work as much as I used to with JT Financial or CapEx. There are several reasons for this.
Primarily, the duties were simply too much for me at a time when I was having stress with my real-life job, and at a time that I should have been focusing on SL Reports.
I have recently quit my real life job - a nightmare publishing position that started out as one thing and evolved into something else far more stressful over the course of 2+ years - it's something I might tell you about later in a different post.
In my exit from real-life work, I considered approaching Arbitrage Wise - a fabulous long-time friend and owner of SLCX and SLR, among many other fine companies - about working more for CapEx and JTF again... but I didn't.
The reason was I started waking up every morning and loading SLR on my screen. I started realizing that we had loyal readers and investors waiting on me to do things I had promised long ago but failed to follow through with.
Now, do I think that I was lazy... that I screwed up... that I wasted time that I should have been spending on SLR? All of those months that I was wrapped up in the bank, Wise Metaverse, and the exchange? No, I don't.
I am rarely arrogant, and I rarely boast, but take this for what it is - defense of my actions. I feel like I made a difference in our SL financial community.
For those of you that don't know, in July of this year Investor Allen started requiring real-life ID from CEOs. I complied grudgingly, even though my on-again-off-again friend who we now know as "Kyle Van Leuven" assurred me I didn't need to, but the owner of SLR, Arbitrage Wise, would not provide his info to Allen - I guess now we see where he was justified in his distrust of Allen, which is neither here nor there.
For the record though we now know Thanh (pronounced 'tawn' so I hear) Ho quite well, with him having spoke at Southern Methodist University and on Metaversed's Metanomics. But anyway...
Allen mentioned to me one late evening because of Arb's failure to comply, SLR would need to be delisted from AVIX. I really did not care at that point, but I did contact Arb and let him know. It's funny though... when Allen threatened this to me, I went off... totally... I told him exactly what I thought about his failed Ginko buyout, his own ID issues, and probably some other things I would not remember without pulling up IM logs... which I cannot publish here.
But Allen did not respond hatefully. He responded as a tired and upset young man... probably the same as I would... probably feeling much the same way I felt... like he just didn't care and didn't want to deal with it. It was at that point I asked him, "Allen, would you consider selling AVIX to JTF?"
He replied positively, and at that point I messaged Arb and said, "Arb, would you be interested in buying AVIX?"
LOL...
The rest is history, but at that time... for me... it was "ID problem solved, delisting problem solved, and software development for our own JTF exchange problem solved."
I was involved with JTF & CapEx on throughout July, August, & September before my real life caved in around me. SLR was a site in need of major assistance, I was stressed out all the time with work in RL, work in SL, and I was at the breaking point. Some of you know, and some of you do not... that I almost followed the footsteps Jasper by simply logging off. But I didn't.
I simply started stepping back, taking breaks from SL... managing things from the sidelines. It helped. I remained involved.
Yes, there were arguments along the way - bad ones. Ones that in your wildest dreams you could not imagine. Not just with me, but with all of the CapEx staff... but they were part of us building a better exchange for the SL investing public. And I think our arguments... our negotiations... did a fine job.
I am proud of what CapEx has become. I am proud of the new ID policies, the more careful review of IPOs, the new fraud detection mechanisms, the circuit breakers, the market makers... everything.
Bottom line though is the drama I have been through has nothing to do with why I stepped back from that world. CapEx now has a fine staff: Bo, Arb, Reina, Kadena, Cash, Sky, all the reps and managers you see in-world, and all the affiliates out in the field. They can manage without me.
I still randomly comment on IPO applications and receive faxes for the exchange, but not much else. And it's because I know they are a top-notch bunch with the brains and brut strength to get the job done.
So what's with SLR? Well I am happy to report that traffic is extraordinary... every morning when I wake up I update the SL community with the latest market news, and even an editorial every once in a while... be it popular or not.
I am proud to have just interviewed IntLibber "officially" about ACE... a great article. I talk to him often usually complaining about some random thing because I know he will listen and he is too nice to tell me to "eff off." I guess this is our first official press thing together though.
But the ACE interview is just the first in a series about all the exchanges. I will also be profiling CapEx, ISE, VSTEX.net, and WSE. Guardian even mentioned that I should profile Anshe's DSE... we'll see (that might be interesting though).
SLR is going well. But how about me?
Guys, I don't promise to be here forever. I have screwed up in the past of defining my first life by my Second Life, and I don't want to get back into that habit. I do have a real life. That is one reason that I *know* my real name shows up on this blog, yet I keep it here... to remind me there is something more out there.
I love to travel, I love to shop and dine, watch movies, do real life work... and this time of year... I love to drive around Northwest Oklahoma City looking at Christmas lights with my partner of five years.
So what is my immediate future in SL? SL Reports will continue to grow and prosper, we have even talked about overhauling our web template. Traffic will keep growing. So will revenue.
After that, who knows? I can't lie... my eyes and ears are always open, searching for someone to take over as SLR CEO. I continue to search, for someone that can do a better job than I have... but also continue on with my dream and my work, which I feel have made a difference here.
I doubt I will ever totally leave SL. I will probably always be the loudmouth with an opinion on something. I will probably still write and comment on stuff around CapEx, SLR, SLNN, and everywhere else. I definitely plan to continue blogging at Second Chaos. I am proud of that... which brings me to our closing.
I will leave you with just a couple thoughts tonight. First is that no matter what you do in SL, always endeavor to make a difference... don't do what's popular if you know in your heart that something else is the right choice. Second, is that remember Second Life is always just that... a SECOND LIFE. Don't define who you are by what happens here. Remember that you have a family that loves you and a world of opportunity awaiting you outside your front door.
Make a difference in your Second Life, but enjoy your first.
Until Next Time,
Xavier Mohr, CEO
SLReports.net
I figured there's no better subject to start off with than my affiliations and perceived positions with JT Financial Bank, the SL Capital Exchange, and SL Reports (CapEx: SLR).
I receive the question time and again from random people if I have quit JTF and CapEx, if I have had some form of "falling-out" with the management and so forth. The answers to those respectively are "kind-of" and "no."
I do not work as much as I used to with JT Financial or CapEx. There are several reasons for this.
Primarily, the duties were simply too much for me at a time when I was having stress with my real-life job, and at a time that I should have been focusing on SL Reports.
I have recently quit my real life job - a nightmare publishing position that started out as one thing and evolved into something else far more stressful over the course of 2+ years - it's something I might tell you about later in a different post.
In my exit from real-life work, I considered approaching Arbitrage Wise - a fabulous long-time friend and owner of SLCX and SLR, among many other fine companies - about working more for CapEx and JTF again... but I didn't.
The reason was I started waking up every morning and loading SLR on my screen. I started realizing that we had loyal readers and investors waiting on me to do things I had promised long ago but failed to follow through with.
Now, do I think that I was lazy... that I screwed up... that I wasted time that I should have been spending on SLR? All of those months that I was wrapped up in the bank, Wise Metaverse, and the exchange? No, I don't.
I am rarely arrogant, and I rarely boast, but take this for what it is - defense of my actions. I feel like I made a difference in our SL financial community.
For those of you that don't know, in July of this year Investor Allen started requiring real-life ID from CEOs. I complied grudgingly, even though my on-again-off-again friend who we now know as "Kyle Van Leuven" assurred me I didn't need to, but the owner of SLR, Arbitrage Wise, would not provide his info to Allen - I guess now we see where he was justified in his distrust of Allen, which is neither here nor there.
For the record though we now know Thanh (pronounced 'tawn' so I hear) Ho quite well, with him having spoke at Southern Methodist University and on Metaversed's Metanomics. But anyway...
Allen mentioned to me one late evening because of Arb's failure to comply, SLR would need to be delisted from AVIX. I really did not care at that point, but I did contact Arb and let him know. It's funny though... when Allen threatened this to me, I went off... totally... I told him exactly what I thought about his failed Ginko buyout, his own ID issues, and probably some other things I would not remember without pulling up IM logs... which I cannot publish here.
But Allen did not respond hatefully. He responded as a tired and upset young man... probably the same as I would... probably feeling much the same way I felt... like he just didn't care and didn't want to deal with it. It was at that point I asked him, "Allen, would you consider selling AVIX to JTF?"
He replied positively, and at that point I messaged Arb and said, "Arb, would you be interested in buying AVIX?"
LOL...
The rest is history, but at that time... for me... it was "ID problem solved, delisting problem solved, and software development for our own JTF exchange problem solved."
I was involved with JTF & CapEx on throughout July, August, & September before my real life caved in around me. SLR was a site in need of major assistance, I was stressed out all the time with work in RL, work in SL, and I was at the breaking point. Some of you know, and some of you do not... that I almost followed the footsteps Jasper by simply logging off. But I didn't.
I simply started stepping back, taking breaks from SL... managing things from the sidelines. It helped. I remained involved.
Yes, there were arguments along the way - bad ones. Ones that in your wildest dreams you could not imagine. Not just with me, but with all of the CapEx staff... but they were part of us building a better exchange for the SL investing public. And I think our arguments... our negotiations... did a fine job.
I am proud of what CapEx has become. I am proud of the new ID policies, the more careful review of IPOs, the new fraud detection mechanisms, the circuit breakers, the market makers... everything.
Bottom line though is the drama I have been through has nothing to do with why I stepped back from that world. CapEx now has a fine staff: Bo, Arb, Reina, Kadena, Cash, Sky, all the reps and managers you see in-world, and all the affiliates out in the field. They can manage without me.
I still randomly comment on IPO applications and receive faxes for the exchange, but not much else. And it's because I know they are a top-notch bunch with the brains and brut strength to get the job done.
So what's with SLR? Well I am happy to report that traffic is extraordinary... every morning when I wake up I update the SL community with the latest market news, and even an editorial every once in a while... be it popular or not.
I am proud to have just interviewed IntLibber "officially" about ACE... a great article. I talk to him often usually complaining about some random thing because I know he will listen and he is too nice to tell me to "eff off." I guess this is our first official press thing together though.
But the ACE interview is just the first in a series about all the exchanges. I will also be profiling CapEx, ISE, VSTEX.net, and WSE. Guardian even mentioned that I should profile Anshe's DSE... we'll see (that might be interesting though).
SLR is going well. But how about me?
Guys, I don't promise to be here forever. I have screwed up in the past of defining my first life by my Second Life, and I don't want to get back into that habit. I do have a real life. That is one reason that I *know* my real name shows up on this blog, yet I keep it here... to remind me there is something more out there.
I love to travel, I love to shop and dine, watch movies, do real life work... and this time of year... I love to drive around Northwest Oklahoma City looking at Christmas lights with my partner of five years.
So what is my immediate future in SL? SL Reports will continue to grow and prosper, we have even talked about overhauling our web template. Traffic will keep growing. So will revenue.
After that, who knows? I can't lie... my eyes and ears are always open, searching for someone to take over as SLR CEO. I continue to search, for someone that can do a better job than I have... but also continue on with my dream and my work, which I feel have made a difference here.
I doubt I will ever totally leave SL. I will probably always be the loudmouth with an opinion on something. I will probably still write and comment on stuff around CapEx, SLR, SLNN, and everywhere else. I definitely plan to continue blogging at Second Chaos. I am proud of that... which brings me to our closing.
I will leave you with just a couple thoughts tonight. First is that no matter what you do in SL, always endeavor to make a difference... don't do what's popular if you know in your heart that something else is the right choice. Second, is that remember Second Life is always just that... a SECOND LIFE. Don't define who you are by what happens here. Remember that you have a family that loves you and a world of opportunity awaiting you outside your front door.
Make a difference in your Second Life, but enjoy your first.
Until Next Time,
Xavier Mohr, CEO
SLReports.net
Holy Crap, Guardian
Hello World,
My good friend Guardian Market talked me into posting on his blog. Not quite sure what I am going to post about, but I look forward to it! :-P
I'm sure I will be bitching about something, as usual... definitely about Second Life, probably about finance. We'll see.
And if you haven't already done so, please be sure to check out SL Reports, where I have just inverviewed IntLibber Brautigan about the ACE stock exchange. I also have interviews with the other exchange heads coming soon, so stay tuned!
Sincerely,
Xavier Mohr
SLReports.net
My good friend Guardian Market talked me into posting on his blog. Not quite sure what I am going to post about, but I look forward to it! :-P
I'm sure I will be bitching about something, as usual... definitely about Second Life, probably about finance. We'll see.
And if you haven't already done so, please be sure to check out SL Reports, where I have just inverviewed IntLibber Brautigan about the ACE stock exchange. I also have interviews with the other exchange heads coming soon, so stay tuned!
Sincerely,
Xavier Mohr
SLReports.net
Hello World
Spurred by the success of one of my friends, Maelstrom Baphomet and his blog The Dragon's Bite, I thought I would try my hand at this blogging idea and see how it goes. I have no intention of this becoming a solitary blog, and hope to invite other contributors to post here as well (please IM me in-world if interested). The content will be about the Second Life economy, primarily, but may include other random topics from time to time, some perhaps dealing with First Life (the real world, for the uninitiated) as well.
Welcome, and please, comment away! I love feedback!
Welcome, and please, comment away! I love feedback!
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