Untitled+Business+Community

=Community Development in the Business World=

One of the most thriving communities we can observe in Second Life is that of the business world. On the Grid, it is possible to find a variety of stores selling products ranging from clothes and cars to “scripts” and appearance modifiers. The ability to build virtually anything one desires and then sell it for a profit has given room for a booming business community to thrive within SL, and although the business community has in many ways been modeled after that of real life, the relational development on the Grid is strikingly different in numerous ways.

Within the business community of SL we can observe three different categories of relationships: relationships between business owners, between owners and consumers, and between consumers. Each of these categories of relationships has developed striking characteristics that we can compare and contrast with those observed in real life. Primarily, the focus will be on how these relationships are developed from individual motives of those involved and the institutional features which constrain and regulate how the business community grows.


 * Relationships between business owners **

Before explaining the relationships developed within this SL community, it must first be explained what is meant by and involved with in being a ‘business owner’ in the Grid.

In SL, business owners are typically the creators of the products they sell. For instance, if one were to visit a clothing store and speak with the owner, it is very likely that the owner is also the creator of all the items up for sale. Although this is not an absolute rule by any means, it was the situation most encountered when visiting SL businesses. This is an important distinction that needs to be noted between real world businesses and those found in SL. In the real world, it is much less common for the owner of the store to also be the creator of the goods. Instead, we typically find that those who own or manage a real life business do so as a third-party that is distinctly separated from the creation of the goods being sold.

It is important to understand this clarification about SL business owners in order to properly examine the development of the community they compromise. When we talk about business owners in SL, we are, on most occasions, talking about creators of merchandise, not the third-party salesmen we observe in real life.

The distinction of business owners as creators helps to explain the resulting community that has developed within this category. Many business owners regard themselves as an artist, or someone pursuing a craft. This is likely due to both the time it takes to develop the skill of building objects in SL and the artistic qualities needed to build something appealing. A further development of this idea about being an artist is likely because what is being done in SL is often done during leisure time in the real world, making the "business" aspect of SL distinctly different than what we associate the word "business" to mean in real life. This artistic characteristic attributable to many business owners has developed a community very similar to how we see communities of local artists develop in a small town. Builders are connected with each other primarily through word of mouth after one builder sees the work of another, and then form a relationship based on their similar interests.

Despite being similar to the relationship of a community of local artists in real life, many business owners do admit to doing it “for the money.” However, the motivation entangled in the idea of “for the money” is starkly different than what we find in real life.

The “[|bottom line]” is virtually non-existent in SL, and this fact contributes a great deal to the development of the community between owners. Because what most builders are doing in SL has no effect on their ability to survive in real life, both the act of building and the money they earn is all a luxury. This has an effect of sharply decreasing the competitive behavior of business owners, thus contributing to this notion of a “community of artists” that many business owners have. While one particular business owner absolutely wants a consumer to buy from them as opposed to their neighbor, the environment appears to be much less fierce, as what is at stake in SL is much less than what is at stake in the real world.

The result here is that businesses rarely give the feeling of being “individualistic” and “competitive.” Most business owners encountered (although they are admittedly hard to come by) rarely pushed to “sell” their products, and instead preferred engaging in small talk about what they do, why they do it, and other things. Their desire to "make the sell" and profit appeared to be very minimal in comparison to what we experience in the real world.

Further, when meeting business owners in their stores, rarely did it seem that the activity of owning a business was individualistic. Most builders in their shops were accompanied by one or two fellow contributors to the store, and most of the groups of owners had met through word of mouth about the good products they were each creating. While many shops do market their products under a single name of the creator, it was typically found that the name belongs to whoever first opened the store before others joined them. Instead of feeling competitive, most admitted to enjoying collaborating together to create a store where high quality objects could be displayed and sold.

In summation, the removal of the “bottom line” as the most prevalent motivating factor for SL business owners seemed to deeply reduce the individualistic and competitive nature of the community. Because no one’s life depended on the financial success of the business, many owners were more interested in the quality of their products than they were ensuring that their neighbor wasn’t selling more goods than they were.


 * Relationships between business owners and consumers **

The point of any business is to complete transactions with a customer. As noted in the research concerning the development of community between business owners, producers in SL are not nearly as interested in the “bottom line” as they are in real life, and so the creation of a store might be motivated by a variety of reasons unrelated to a pure desire for profit. What is always the case though, is that businesses are created in order to develop an interaction between owners and consumers. This interaction, however, is vastly different than what we observe in real life.

To begin, the relationship between owners and consumers can be best described as isolated. When shopping for goods on the Gird, it is very rare to ever come in contact with an owner of the store. In fact, most consumers we encountered in-world unequivocally acknowledged that it is virtually impossible to find a store that has both products you are interested in buying, and a store owner there to talk with. Why the SL business world manages to thrive, despite the obvious disconnect between producers and consumers, can be explained through an examination of the institutional features shaping and constraining how stores are managed.

An examination of the institutional features governing the SL business world has to begin with an overview of constraints placed on property. Briefly, when an object is created in SL, the builder has the option to set various levels of permission on that object. Permissions include (but are not limited to) who is allowed to pick up the object, who can replicate it once the object has been placed in one’s inventory, or who can modify the object. For instance, if someone were to build a chair, they could have the option of setting the permissions that would not allow anyone to alter that chair in any way (move it, pick it up, replicate it). When these permissions are set, there is nothing that a third-party can do to overcome them.

The level of control over permissions in SL can be compared to the //lack// of control in real life. Constraining what a third-party can and cannot do to objects one personally owns is limited to the establishment of social norms and a legal system. Although these methods of constraint do help maintain a level of control over third-party actions, their full regulatory power is limited greatly compared to those available in SL.

Social norms and legal constraints in real life seek to constrain what people are willing to do. The laws prohibiting people from vandalizing private property, and the social norms which frown on such acts, can only discourage people from doing something they might otherwise do. If, however, they choose to go against the laws and social norms, although they might be punished and placed in jail after the fact, their //ability// to vandalize property is only minimally regulated. That is to say, if someone wants to vandalize someone else’s property, social norms and legal constraints cannot prevent them from doing so.

SL, however, is governed by permissions that offer a level of control over the actions of third parties not present in real life. To use the same example, if someone wants to vandalize the private property of another person in SL but lacks the permission to do so, the act of vandalism is impossible. The methods of constraining third parties on the Grid is much more absolute than those in the real world. Understanding just how effective controlling the permissions of third parties in SL is will be vitally important in making sense of how and why the business community has been able to form the way it has.

The somewhat ineffective methods of controlling the actions of third parties in regards to private property add many institutional constraints that business owners in the real world have to find a way to work around. These constraints typically go unnoticed, as they are what we are all used to working with on a day-to-day basis, but once removed, reshape the development of the community in major ways.

Consider the amount of infrastructure that is necessary in the real world just to ensure that goods being produced and put up for sale are not damaged or stolen. At the most basic level, businesses have to invest money into erecting a building that cannot be broken into (effective locks on all important doors). Beyond that, stores can only stay open when there are people there willing to work, which also means that businesses can only afford to pay for an employee to work during hours when business traffic will be greater than the worker’s wages. Other costs have to be factored into when determining business hours as well as store owners have to take into account not wanting to leave just one worker in a store where expensive items are being sold in the middle of the night when the chance of a robbery might be greater. Large businesses who have a greater chance of having merchandise stolen without workers noticing invest in security cameras and employees to work solely in “loss prevention” to ensure that the business is not being robbed on a daily basis. All of these factors are institutional constraints on how a business can be run in real life based on the generally ineffective methods that the real world has for protecting private property. All of these factors, thus, disappear in SL.

In SL, there is no need to take steps to ensure that property is not stolen from a store, as theft is impossible in the virtual world. This institutional feature of absolute control over property has caused major changes in how businesses are managed on the Grid.

As noted before, it is very rare to encounter a business owner while shopping in SL. While it is not impossible, the chances of a casual shopper meeting the creator of the products they are interested in buying is a rare event. This appears to be a direct result from the lack of necessity in keeping a store staffed during operating hours. Since a store owner does not need to prevent people from stealing, they no longer need to make sure that people are working while customers are shopping.

A further feature in the SL business world that contributes to the disconnect between the producers and the consumers is how transactions are managed in world. Beyond preventing theft, real world businesses are governed by the need to have an employee at the store so that a purchase can be made. This constraint has similar effects to those observed in the discussion about control over private property. Store owners have to make decisions about keeping the store open based on having to pay the wages of those working because an employee must be there to assist in the transaction between the customer and store. As explained earlier, this means determining when it is most cost-effective to keep a store open, and when it is better to close the doors.

This constraint observed in real life, which tends to force interaction between sellers and buyers, is another constraint that has been removed in SL. The removal of such forced interactions can be seen as another factor contributing to the disconnected relationships between producers and consumers. SL has in place a system where transactions can be made by the consumer without ever having to interact with the seller. Someone wishing to buy something for a store simply has to click on a “Buy” option and the item will automatically be placed into your inventory. As well, the cost of the item will automatically be subtracted from your account and placed into the account of the seller. SL has eliminated the need for any interaction between the seller and the buyer, thus eliminating any forced relationship between the two.

These two factors (control over private property and the transaction system) allow the business community in SL to develop and thrive without ever having to build a relationship between the business owners and their respective consumers. The two main features that we observe in real life as contributing to a forced interaction between buyers and sellers are eliminated in SL, and with that, the business community has developed almost no observable relationship between the average consumer and producer.

A further constraint on community development between business owners and consumers in SL is the combination of the size of the Grid verse the number of active players, and the fact that SL is a program used internationally. When you consider that business owners have no need to keep employees at their store in order to be successful, and combine that with the very large and empty Grid, it seems fairly obvious that the chances of finding a store with active employees is very rare. Further, because SL is played internationally, many stores might be owned by someone in a different time zone than the person shopping, thus reducing even further the chances of interaction between the producer and consumer. These two factors playing together seem to contribute even further to the disconnected relationship between business owners and shoppers.



 We have looked at how the consumer in SL has virtually no relationship with the business owner, and some of the effects on the community that this has. Now we want to examine how the community of consumers has developed on the Grid.
 * Relationships between consumers **

The “consumer community” observed in SL can be broken into two parts. First, there is the community developed around the actual shopping experience, and second, there is the community that does most of the work in advertising for businesses via word of mouth.

An unsurprising element of the consumer community in SL is that it is, for the most part, isolated. The same institutional constraints found in SL (size of the Grid verse the number of active players) make general shopping a largely individualistic activity. Shoppers were almost never observed in groups and, unlike what is seen often in the real world, the activity itself seemed better suited for soloing. A look, once again, at some institutional features of SL will help to explain this phenomenon.

In the real world, shopping is often seen as a group activity, a way to be social. While there are most likely a multitude of reasons for the development of shopping into a social activity in the real world, we might be able to determine why the community in SL has evolved differently through a look at some of the institutional constraints in the virtual community.

One constraint we have, for instance, is that most communication in SL is done through typing, while movement is also done by using the keyboard. This means that effectively communicating while browsing shops is very difficult, as walking and talking at the same time is almost impossible. This difficulty alone could render shopping as a social activity painful, and thus giving us the isolated community we see when consumers are shopping.

Not being able to effectively communicate while moving has resulted in a large part of how the second aspect of the consumer culture has been formed. In light of the difficulty of moving while talking, most social activities in SL have developed around activities such as dancing where the movement relies on a script to control your avatar. This way, communicating while doing some sort of activity in a group is very easily done. Most consumers that we spoke with in SL had discovered the “best” places to shop via word of mouth in such situations. Because stores have limited advertising ability compared to real life, the consumer community developed through social interactions such as dancing at a club and chatting as the primary way people find the best shops on the Grid.

Thus, the consumer community forms largely away from the business world. The most evidence for relationships between consumers appears to come from people who have built relationships outside of “the market”, and discussions relating to the business world tend to happen during leisure activities after friendships are formed.



After examining the three prominent categories of communities within the broader business community in SL, we come away with several observations.
 * Conclusions **

SL removes institutional constraints that we experience in the real life business world – the “bottom line”, protection of assets, and customer relations. Many of these “constraints” on the community are often seen as burdensome to those involved in real life, and the removal of such constraints does in fact change the entire development of relationships. Consider some common criticisms of the consumer culture in real life, and how removing certain constraints in SL has changed them:


 * Some criticisms suggest that we are burdened by “cheap” products that cost the least. The removal of the “bottom line” in SL appears to relieve the burden of “making money” and allows the majority of business owners to concentrate on creating worthwhile products, as opposed to products rendering the most profit.


 * “The bottom line”, because it forces sellers to focus on making money, often creates an uncomfortable environment for buyers who feel pressured by salesmen to purchase certain products. The removal of this in addition to the features in SL that remove most interactions between buyers and sellers eliminates this problem, creating what some users interviewed in SL view as more enjoyable, despite being void of the producer/consumer relationships we develop in real life. In other words, relationships are non-existent in many areas of SL, but the alienation that consumers and producers often feel towards one another does not exist, because artificial relationships are never forced.


 * A final criticism of the real life consumer culture that we can address in terms of how the SL community has developed differently is that rigid, drone-like treatment that both customers and employees are subject to, once again, as the result of the “bottom line”. Besides the elimination of the “bottom line”, the elimination of necessary institutions such as the “hourly worker” and “business hours” has done much to develop a thriving business community that does not rely on turning individuals in schedule-focused drones. People can typically browse a store at their leisure, at any time of the day, and there is no need to employ workers to work hourly for the store

The most important aspect to understanding how the SL business community has been able to thrive without developing in the same way as the real world is that users on SL are in most cases not dependent on an income from SL in order to survive. The other institutional features which increase and decrease constraints in community development, although important in their own respects, are largely dependent on the elimination of the “bottom line” as the fundamental change we observe from real life to SL.

Overall, we can say that the business community in SL has developed in a way that generally //decreases// the individual relationships involved in producing and consuming //without// decreasing the quality of experience and subsequent ability for a thriving community to develop. While not conclusive, these observations seem to indicate that many “necessary evils” in the business community of real life, might be just that.

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