Want to Make Money in Second Life? It's Harder Than You Think

Even though the Linden dollars Cochran trades in can be redeemed for real U.S. dollars, her business is conducted with virtually no contract enforcement. She does not even have full contact information for many of the people she lends to.

As a result, she said that ultimately her business comes down to one thing: "It's all about trust," she said.

Yet if the "Second Life" economy is to grow, trust alone won't be enough. As more businesses and consumers crowd the virtual marketplace, services like credit reports and a Better Business Bureau will need to be introduced in order to establish legitimacy.

"There are so many people out there that are trying to scam you," said Peter Lokke, the lead organizer of the business discussions at this weekend's conference. "The honest people out there have to deal with that."

Working Out the Bugs

Compounding these real world problems are a set wholly unique to "Second Life": glitches and bugs. These technical issues can make "Second Life" a particularly tough market to crack since resolving them is largely out of the hands of business owners.

Brown used to sell many of her products at virtual malls, or strips of stores that gave entrepreneurs access to consumers. But, she said, as "Second Life" has grown the technology has not kept up, rendering malls useless and no longer profitable.

"There are a lot of bugs in 'Second Life,'" said Brown, who now vends out of boutique shops. When shopping at the malls currently available, consumers may have to wait 15 minutes for all the stores' products to load on their computer, she said.

Rather than sit around and wait, players often shop elsewhere.

"People go into 'Second Life' because they would be bored otherwise. They want something to do," explained Guni Graef, the husband of "Second Life" celebrity millionaire Anshe Chung and co-founder of their mammoth Anshe Chung Studios.

Additionally, entrepreneurs said they are often forced to spend large amounts of time each week working through dozens of customer service complaints from customers who ordered a product but did not receive it.

Brown said many of her customers complain when a glitch in the game causes clothing to be only partially delivered, or not transferred at all. This drains her time, and limits profitability.

Crowded Out by the Big Guys

Another major hurdle for "Second Life" entrepreneurs are huge real-world corporations armed with enormous budgets looking to carve a piece of the "Second Life" pie for themselves.

Demanding higher profit margins, such companies eschew completely the smaller entrepreneurs' approach of selling things in "Second Life" for money. Instead, they simply give away items and experiences to create brand awareness in the first world.

"If [major corporations] go in there with a retail approach, you're not going to be successful. They have to come in with the goal of marketing," said Dave Young, a vice president at Purple Stripe Productions, which helps large corporations establish a presence in "Second Life."

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