It’s something I’ve written about before (on a number of occasions), but the topic comes up from time to time. Can Second Life survive without mass growth? Absolutely, it can.

Now this is one of those “Never try to eat anything bigger than your head” notions, where your strategy and your market need to align.

Nothing kills a product or service dead faster than mismatching the scope of your strategy to the scope of your market. Aim too high with a small market, and you’ll go hungry. Aim too small with a large one, and you’ll choke.

Second Life did in fact choke back in 2005 and 2006. In a sense, the circumstances of Second Life’s slight declines in user activity and economics are are indirect consequences of that choking. Simply put, Second Life attracted more users than Linden Lab’s approach could handle and attempts to compensate through strategic change were slow and imprecise … well, ham-fisted.

If the scope of your market is niche-sized, then your product strategy needs to be niche-sized. If your market-scope is mainstream-sized, then your strategy needs to be as well. Nothing fails quite so effectively as getting those mismatched (other than, say, a building fire).

Second Life (and Linden Lab) can absolutely survive, and even prosper with just a niche audience – and do far better than it is doing now – so long as the Lab’s strategy marries up well (both in scope and in direction) with its market. Get that wrong, and it doesn’t really matter much how potentially awesome market numbers might be (either in current or potential users), you’ll just end up squandering them and it will all come to naught in the end.

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Tags: Linden Lab / Linden Research Inc, Opinion, Second Life, Virtual Environments and Virtual Worlds