Random Musings

Panel 3 of the day (Virtual Goods Summit 2008) has the following:

* John Hwang, RockYou
* David King, Lil Green Patch
* Shervin Pishevar, SGN
* Andrew Trader, Zynga
* Moderator: Mark Wallace, Wello Horld

Q: What are the advantages/disadvantages of doing virtual goods in a social network setting?

john hwang - updates are important; refresh content to keep users engaged; userbases on social networks is growing which directly correlates to your own userbase growth.

andrew trader - you do not control the users, the social networks do. that makes fraud and cheating a bigger problem. harder to build fraud and and cheating prevention systems. wants facebook to offer a payment processing system.

shervin of sgn - recommends you build a standalone service to go with your FB or Myspace app.

Q: what % of users on social networks purchase virtual goods? average revenue per user (arpu)?

AT - depends. estimates of 3-8% all seem high. economies are complex and you have to figure out how to manage the economy. (note from earlier in panel, AT mentioned $4K-$5K daily revenue on yoville)

JH - 3-5% is possible, but we see abt 10% of users try to pay for currency into the game. of the 10%, only 10% actually complete the transaction. also recommends a limit on able to level up via currency because it creates inflation of points and ruins the experience.  sees $20-30 revenue per thousand active daily users on speed racer.

DK- very limited percentage of users want to pay, so it avgs out to less than penny per user.

SP - its healthy but we will not disclose.   (lol)

everyone seems to want FB to develop a payment system. this would 1) help with getting users over the account registration hump, 2) make it easier to manage fraud, 3) see #1:)  but after seeing the fiasco of beacon, do we really want FB to have our financial information as well?!?!

Q: barriers for entry?

JH - apps in social networks have more virality because people want to show off their personalized creations. they buy, mod, customize and then show all their friends. therefore, there is room for innovation and success by individual developers.

AT - the entry costs for developers in the social network business is going up.  games are becoming better quality and more rich in experience, so it now takes more to build and launch.  (JH - jokes that AT just wants individual developers to go work for zynga instead)

Audience question: what is the ratio of active users to registered users and what are your retention rates?

DK - says those numbers dont matter so much because there are so many other factors at play - size of audience, activity of active users, etc.

no one else wanted to answer the question.

audience question: Pros & cons of using real dollars versus points or other forms of virtual currency?

JH - think back to when you were a kid in an arcade. after you changed you money into arcade coins, you didnt know what you were spending. it encourages people to spend more.

* Susan Choe, Outspark
* Lee Crawford, Twofish
* Christopher Donahue, Live Gamer
* Karl Mehta, Playspan
* Moderator: Susan Wu, Ohai

Great audience question - to what extent is it good or bad to seed the economy by giving away free credits or points to get trading and volume moving?

susan choe - do not give anything away for free. period. that will train your community to expect free credits for free.
susan wu - it is better to teach members to do things for credits - like update email, give real name, etc, and then give them credits for that action. this creates a good expectation of reward for engaging in a particular transaction.
dan - reward time value - when ppl spend a lot of time on the site, reward loyalty.  some sites have two forms of currency which can buy two kinds of different kinds goods.  this helps alleviate the gap between the haves and the have-nots. allows members who are strapped for cash but loyal to participate.

at the virtual goods summit today - looks like its going to be an interesting conference - good crowd of attendees. also, i am impressed with the number of women at this conference - way higher than the norm at tech conferences.  wonder why? are women in tech all in virtual worlds?

first panel up today: Branded and User-Generated Virtual Goods

* Brian Balfour, Viximo
* Lee Clancy, IMVU
* Amy Jo Kim, Shufflebrain
* Sean Ryan, Meez
* Moderator: Margaret Wallace, Rebel Monkey

funniest thing to come out of this panel was a comment by sean ryan of meez.  apparently, the women in meez wanted their avatars to look more like they do in real life.  however, the default body type was thin. they received alot of feedback for more fuller figures and changed the options to included more plus sizes.  they still get comments that the plus size isn’t plus enough.  but for men, these issues do not really arise - the most common body type for men is “Buff”.   hilarious

interesting financial fact: imvu is an english only, US based product, but about 40% of their revenue is international.  perhaps the era of focusing only on US visitors is over?

overall sense of the panel is that branded goods are not in high demand as people think. users do not really want the premium branded items yet. and if you are creating a promotional item, it should be free.

i spent labor day weekend and the last weekend of my twenties at the beautifully remote lost trail lodge outside of truckee, california. the lost trail lodge is a truly interesting place. it was pretty empty when we were there, although i have heard that winter is their busy season which is amazing since that is the time of year when you cannot drive to the lodge. in the winter, you literally have to hike in 4 miles, with all your gear and food, at +6000 ft altitude - tough work, which explains why the winter crowd tends to be serious backcountry folks.

amazing kitchen, all the comforts of home, clean and great bathrooms. its off the grid, so its entirely powered by on-site solar panels and a generator during the winter. water comes from a well and tastes so pure. there are two babbling brooks on each side of the property, so you can sit and listen to them babbling. numerous hiking trails lead off from the site. plenty of mountain biking trails and two horses, plus stables for more. o, and did i mention, no internet service and only intermittent cell service depending on which way the wind was blowing.

the location is perfect. close enough to donner lake and truckee to get there pretty quickly once you make it off the long dirt, rocky road to the lodge

and here is the kicker - on the dirt road to the cabin, there are 3 major bouldering places with about 40 route! (split rock, shadow rock)

it was a perfectly peaceful weekend and i highly recommend it to anyone wanting to unplug for a bit.

it has been decided.  i will be going back to baan dada at the end of september.

a bit of background - i have always done a bit of volunteer work, trying to contribute where there was a need. i have worked on DNA exonerations for the Innocence Project, i have represented immigrant women who were victims of domestic violence at Sanctuary for Families and i’ve even done highway trash pickups (no, i wasn’t in trouble and doing community service!)

but nothing has touched me as much as my experience at baan dada.  maybe its the first world poverty versus third world poverty difference? maybe it was the loving and brilliant children at baan dada?  they are wise beyond their years due to their life experiences yet they keep their happiness and wear their hearts on their sleeve.  either way, they’ve got my support for life now.

why am i going back? because there is still so much work to be done. using the over $8000 we have raised thusfar, i will help with some of the building projects. i will send lots of pictures to show you all how much your donations have gone.  this is a real NGO doing real work.  no administrative overhead.  You donate $100 and we go buy concrete bricks to make walls the next week.

also, i will be working with the little boy you see in all my pictures and videos - puchada. he totally stole my heart and won’t give it back.  the schools there refuse to enroll him because of his vision issues, so i am going there with ted to work on a plan to get him in school. maybe there, maybe here.  either way, my #1 priority is to get puchada into school.  as an overeducated, ivy-league pedigreed nyc girl, it is completely unacceptable that a child as bright and inquisitive as puchada is rejected from elementary school.

so, if you want to help out, you can still donate to Baan Dada - buy some more bricks for me to move or you can put a child in school for a year! or you can donate in-kind.  i need monitors to bring to them because the monitors on the donated laptops are breaking, but i can at least rig a monitor to a laptop.  and if you have an old laptop (what, your macbook isnt the latest dual core! to donate, i will bring it.

thank you. i feel very lucky to have friends like you.