Philip Rosedale, CEO, Linden Lab

As the founder of Second Life, Philip Rosedale intends to remain actively involved in guiding the 3-D virtual world through its next stage of evolution despite his recent decision to step down as CEO of Linden Lab . Internet Evolution conducted an exclusive interview with Rosedale, who not only shared his vision for Second Life, but offered his views on everything from cybersex to politics to why virtual worlds are so important to the future of the Internet.

IE: Can you tell us what new features we can expect to see in the next phase of Second Life?

Rosedale: I think this gets into some of what Internet Evolution is about. The next phase of Second Life will be about growing the usage. I anticipate that the usage of virtual worlds as a category will grow by approximately two orders of magnitude, or a factor of 100. That’s a staggering amount of growth. I think it will happen in the next 10 years or so, maybe sooner, maybe a little later. It will be something like that.

In terms of what will happen with Second Life and virtual worlds, we have to make the interface and the user experience simpler for everyone. Today, it’s still too hard. The retention and the initial difficulty in getting into Second Life are too hard. We have to make the interface to the virtual worlds and the experience that people have, especially at the beginning, much more intuitive and direct than it is today. That’s going to be one of the transformations that drive that 100-fold growth in the usage of virtual worlds.

Another enhancement you will see will be the integration of HTML. We actually have a release candidate version of that up right now. You can see that we’re making more than initial progress on that. Today, in the release candidate of Second Life—one that we haven’t pushed out yet but it’s available to use it right now in beta if you want. We have the ability to take a surface -- like a wall in Second Life -- and make that a Web page. That tight integration with the Web is very important. That’s another key feature that we will be building. We should have that 99 percent done over the next year.

IE: Why is the use of a virtual world as a category so important to the future of the Internet?

Rosedale: There are two reasons. First, there’s just a lot of data around us, and we have to understand it, work with it, and categorize it. It turns out that the best way to organize, remember, and manipulate information is if it is presented to using mnemonics and symbols.

For example, if you have a business meeting in Second Life in a Tiki hut on a shore located near blue water, experiments show that your recall of the words that were spoken during the meeting are much better because of being in that environment. The strength of your memory is based on all the associated symbols that you have around you. So, in many cases, information is much more manipulative, consumable, and memorable when it’s presented to us in the form that we’ve grown up with, which is basically the physical world.

Secondly, we are all innately social, so because people are with you in the virtual world when you are consuming the information it provides us with the social interaction we really need. We are surrounded by people we can talk to about the information that we’re consuming, which is an extremely significant thing that virtual worlds provide.

IE: Now that we are in the midst of a presidential election, do you believe there is a way Second Life can impact the electoral process?

Rosedale: Yes, politicians and their constituents will be able to have honest conversations in virtual town hall meetings that can be recorded, transmitted, and used as vehicles to get people interested in politics. People are more forward and expressive about their thinking in a virtual world environment than they are in the real world. As a politician, you can sit down with a diverse group of people, some of them who will aggressively disagree with you, and have a conversation.

At a very low cost, you can get a broader demographic together in Second Life, tape the whole thing, and put it on YouTube Inc. That’s what I think will start happening in politics. Second Life encourages a very open, honest, bi-directional discourse, which is what the good politicians actually want.

IE: What are the chances of a hacker getting into the Second Life system to access or manipulate Linden dollars?

Rosedale: That’s a huge issue for us right now, but the simple answer is: They can’t. It is so easy to catch that stuff. We manage over $1 million U.S. a day in user-to-user transactions. In terms of GDP, that’s the size of a medium-sized U.S. city. We manage the currency for our virtual economy, so we have very sophisticated anti-fraud measures in place.

In a virtual world you have more traceability and accountability than you have on the Internet. This makes it very straightforward in terms of moving money around in Second Life.

IE: There have been reports of relationships, weddings, and marriages, even cybersex activities within Second Life. Would you describe some of the benefits and dangers of exploring relationships and cybersex in a virtual world?

Rosedale: There’s been a lot written about this. Wagner James Au’s book, The Making of Second Life, has chapters on this topic. In general, I think that exploring relationships in a virtual world is empowering. Psychology studies show that relationships in virtual worlds enable people to be more honest about who they are and who they want to be.

If you ask psychologists whether it’s a good or bad thing to create a personality in a virtual world, most of them would probably say, “I don’t know.” But for the psychologists who would probably express an opinion about it, I bet you that the majority would say having relationships in a virtual world is probably a good thing because it enables people to explore their personalities in a way that they might not otherwise be able to do. It will give them a chance to learn something about themselves.

IE: What would you say are the top three aspects of running a successful business in Second Life?

Rosedale: One aspect is: Contribute something to the community. The most successful business people within these virtual communities are the ones who are giving something back. In the real world that’s true, but in Second Life it’s much more true because there is an immediate connection to building the world together. I’ve seen a lot of companies succeed in Second Life by doing something that’s beneficial to everybody in Second Life, rather than just trying to sell a fairly priced service.

A second aspect is: thinking different. Virtual worlds don’t have the same properties as the real world, so the optimal strategies for marketing inside virtual worlds, for example, are different.

The third aspect is: Go where the people are. There are places in Second Life where people gather. Go to one of those places if you’re trying to sell something to a lot of people. Partner with another business. For example, you might want to go to one of the live music venues in Second Life and talk about how you can partner with them to sell what you do. Franchising is another successful strategy in setting up your business in multiple places.

IE: Technology is improving the way avatars look, react, and behave like the real person. Discuss the impact this have on users and future virtual worlds?

Rosedale: Cameras are being built into all the latest laptops and that technology is becoming pretty ubiquitous. So, one thing that will happen with in the next year or two is that whenever you turn on the camera on your computer, we will be able to watch your body, head, and hands and we can match your avatar’s movements to yours.

So if you’re in front of any camera-enabled computer, looking from left to right, nodding your head, or gesturing -- we’ll be able to reach out, look at what you’re doing and make your avatar move the same way. That’s going to be an amazing improvement in the interface.

IE: Now that you’ve decided to search for a new CEO for Linden Lab, describe the qualifications for your ideal candidate?

Rosedale: The new CEO must have a deep understanding of Second Life, why Second Life is important, and where it’s going. In other words, a deep, intuitive user’s understanding of Second Life like everyone here at Linden Lab has. I think that’s all the more important and absolutely critical in this kind of a role. The new CEO has to be somebody that really uses, understands, and gets Second Life.

The important thing to remember, though, is that I’m not changing my job hours or my involvement, so I’m not becoming a chairman and participating from the perspective of the board. I’m going to continue to work here full time. I don’t know exactly what my title will be, but I’ll figure it out with the new CEO.