Gavin Dedeney owns three tropical islands. Along the white sandy beach are stone buildings for rent, each separated by canals and linked by rope bridges. Every day is perfectly sunny, and tenants can sail across a motionless ocean without the slightest breeze. This surreal real estate is just one investment in Second Life, a 3D online realm inhabited by more than 13 million residents from 100 different countries. As its population grows, so does the opportunity for profit. With the real world moored in recession, more and more individuals are turning to this dynamic digital domain for employment and investment.
"We live our lives in 3D, so it's only natural that our technology should mimic that reality," says Mr Dedeney, an online entrepreneur based in Spain. "Second Life is here to stay. " I give it three to five years before we're all interacting in a 3D way." And now, companies in the UAE are entering the virtual world to improve their bottom lines. Last month, Anantara Solutions, an international business consultancy, launched an initiative to help businesses make the leap.
"A number of UAE-based companies are showing interest," says Sundararaj Subbarayalu, a partner in Anantara Solutions, from its headquarters in India. "While these are still in the initial evaluation stage, we are helping them evaluate their best options of what they would have to do. The inquiries are from an educational institution, a real estate business and a leading marketing company, to mention a few."
The idea, he says, is to harness the rich possibilities for profit in Second Life - something that even the average investor can achieve. The potential is so great that Dubai Women's College (DWC), since opening its Second Life campus last year, has created virtual shops to teach its students how they can profit, while they learn valuable business lessons along the way.
Second Life, launched by Linden Lab, a privately owned company based in San Francisco, went online in 2003. Since then the size and scope of the virtual world has grown rapidly. Second Life has an entrenched economy, represented by its own currency, the Linden dollar. Each US$1 (Dh3.67) is roughly equivalent to L$270. Lindens in Second Life can be exchanged for actual greenbacks by visiting the LindeX, the virtual world's currency exchange, and having the funds transferred to your bank account. In 2008, more than US$100 million in Linden dollars were bought and sold in this world.
Corporations such as IBM, Toyota and Sony have established a presence. IBM, for example, uses the space for corporate communications, whereas Toyota and Sonytake advantage of brand promotion and product testing.
Residents of Second Life can walk, fly, swim or teleport across expansive landscapes using an avatar, a life-like 3D character. Clothes, cars and plots of land have become coveted commodities in this world, and millions of dollars are made by individuals around the world selling them. Moopf Murray, for example, one of Second Life's more famous entrepreneurs, earns tens of thousands of Lindens every month selling computer-generated roller skates to legions of eager avatars. Anshe Chung, (imvu.anshechung.com) a Second Life property developer, is poised to become the world's first virtual tycoon. She has amassed an empire worth about L$250 million, which translates into around US$1m. Need a job? Second Life's countless shops are typically staffed with actual employees, which is important to uphold the social and community feel of the programme.
Mr Dedeney, communication and education is at the heart of his business strategy.Originally from the UK, he first arrived in Spain more than 20 years ago to teach English. But in 2006 he left the physical world behind, and hasn't looked back. Still based in Barcelona, Mr Dedeney and his business partner, Nicky Hockly, rent virtual seaside space to educational institutions such as Wales University in the UK and the Uiversity of Alabama in the US. His virtual seaside properties are hubs of communication at which people can meet and teach from around the world at a moment's notice, or reach a surging online audience that's just a click away. They also run The Consultants-E, an agency that constructs private islands for universities, and on the side, teaches corporations how to use the technology.
Mr Dedeney says companies are beginning to take advantage of Second Life's communicative and cost-effective potential. Instead of sending employees on expensive business trips and putting them up in costly hotels, employees can meet online, work from their normal offices and speak in real time. In times of economic distress, it's an efficient, and perhaps necessary, way of doing business.
"There is still a distinct lack of understanding," Mr Dedeney explains. "If you show this to a lot of people they see a cartoon. But things are changing. "This is replacing video conferencing. In Second Life people arrive early and leave late, and take the time to speak with colleagues. The ability to wander around is unique. You can peel off into subgroups, and it replicates a true meeting experience. Most companies miss the concept."
With this concept in mind, Mr Dedeney and his partner have profited. After spending months learning the technology, they purchased three islands for about US$1,500 each, and pay an additional US$300 each month in rent to Linden Lab. The islands - called EduNation One, Two and Three - cater specifically to educational institutions.Dozens of universities and smaller English-teaching schools pay around US$15 monthly to rent a two-storey house, complete with a reception area, boardroom and PointPoint theatre for presentations. In addition, EduNation Two is completely free.
And while this revenue might seem modest, Mr Dedeney says these islands are just the tip of his virtual iceberg. "When people come to us to rent land, they often look on our website and see what we do. In a way it is an advertisement," he explains.
The Consultants-E, the more profitable branch of his Second Life enterprise, captures the reputation of his cheaper islands to entice the big fish in the lucrative online pool. "We do design work for people who want to enter Second Life and have specific requirements," he says. "Colleges decide they want their own island and see the potential, but they don't have the skills to design the island or build and landscape. Most of the time we do complete projects, and they hand over a virgin island."
For consulting, building and training, Mr Dedeney charges between US$5,000 and US$20,000, depending on the size and scale of the project. The London School of Economics, for example, commissioned him to design its campus so they could offer architecture students a virtual canvas on which to create building designs of the future.
The actual construction of an island usually requires about a week, but it often takes much longer before designers can "hand over the keys".
Clients need to be immersed into the Second Life programme slowly and learn how to move and communicate. The Consultants-E is supported by a group of IT freelancers from Columbia, Brazil, Russia and Turkey who provide technical and administrative support. They convene in a virtual office, so overhead remains low, around US$25,000 a month.
But the largest source of revenue for Mr Dedeney comes from teaching companies to use Second Life. With nine training programmes currently running, at a rate of about US$200 per hour, they quench a thirst for the virtual.
One of his most recent clients was Cambridge University Press. Mr Dedeney says the company was seeking new business models for the world of publishing, including conferences and readings with authors using Second Life as the venue.
"They have an innovations department that is constantly looking at new technologies," Mr Dedeney says. "Someone there had taken an interest in Second Life and thought their department needed training in the basic skills.
"We often do training for those looking to make money and cross over into online commerce."
Dubai Women's College, the first school in the region to join Second Life, has also embraced the shift to digital. Since opening its virtual gates last year, the campus curriculum focuses on helping students understand and profit from the Second Life economy.
And recently, Renato Quero, a multimedia developer and designer at the school, has worked with information technology students to establish the campus's first abaya shop. Located in the college's public forum, just outside the gates, visitors can put on an abaya, if they wish to, before entering campus. Abayas range in cost between L$500 to L$1,000, or about Dh16. While the shop does make money, the idea is to teach DWC students the basics of how start a business and profit in Second Life.
"As part of virtual space, they are using it to absorb the concept of e-commerce trade," Mr Quero says. "You can simulate it all, the concepts of money and marketing."
Sharifa Hjjat, the e-learning coordinator at the college, hopes simple business concepts, such as the abaya shop, are only the beginning of e-commerce at the college. The programme, she says, has tremendous room to expand. "I think we can take this project even further by bringing the school's business department forward," Ms Hjjat adds. "We are open to finding different ways for online business to grow."
Anantara's Solution's recent move into Second Life consulting, and the involvement of several UAE companies, is another leap of faith into the potential for profit online. Mr Subbarayalu says he couldn't identify the companies until they have progressed beyond the negotiation stage.
Having a presence in the popular virtual world, he says, is similar to starting a website eight to 10 years ago. The goal is to help people make the shift to virtual investment. "We help our customers identify the right approach to a presence in Second Life and create a business model for them," he says. "We also create their physical presence in Second Life and do all the technical work required to create the presence."
Mr Subbarayalu estimates the cost of renting a space of about 20,000 sq ft with consultancy from Anantara Solutions would require an investment of US$10,000. But before you make an investment, says Mr Dedeney, it's a good idea to spend time in Second Life to get a feel for the culture. Too many people, he says, enter and expect to do business as they would in the real world. The difference, he says, is that users demand a personal approach. Humility and respect is important to Second Life residents. "It's not a matter of just setting up and wandering off," Mr Dedeney explains.
For example, providing cheap and accessible rental space on his three tropical islands was a springboard to more substantial building and training projects. . He recommends that people interested in starting a business spend time as an everyday user in to get a feel for the community before making an investment. Navigating Second Life effectively involves a considerable learning curve. He says it took several months before his business began producing revenue, so patience is required.
Second Life, he says, is a radically different land of opportunity. "It's like moving to a foreign country," Mr Dedeney explains. "You don't run around and shout out your presence. You take your time, and learn the language."
jtodd@thenational.ae
