Running Business in Second Life: Where are the objectives of the groundswell?

A virtual world like Second Life enables people to extract help from each other, draw the strength from each other, and get things needed or desired from each other, rather than from traditional corporations. Such features make Second Life a groundswell. According to Bernoff and Li, "groundswell is a social trend in which people use technologies to get things they need from each other, rather than from traditional institutions likes corporations". Many real world businesses, big or small, employ groundswell as means to seek opportunities to gain greater productivity and competitive advantages and become quite successful. Yet 90% of corporate's virtual world projects fails within the first 18 months. Why such a high failure rate? In this study, we link the high failure rate of many corporations' virtual world projects to lack of or misalignment of their in-world business functions to the five objectives of the groundswell. Fifty two (52) avatar-based businesses were studied, analyzed to extract their in-world business functions and the five dimensions of groundswell objectives. We found the misalignments between the in-world business functions and five dimensions of groundswell objectives is most likely the cause of the high failure rate of many corporate's virtual world projects. This preliminary study indicates that groundswell objectives may apply to in-world business just as well in real world businesses. However, more future studies are needed to establish groundswell objectives unambiguously.