Friday, 4 January 2008

How Clever is Clever Zebra?

Things have been rather quiet for a while over at Metaversed.com. Not quite as sepulchral as 3pointD, to be sure, but nevertheless it is a site that has faded from its early days as a young, snotty, opinionated upstart in virtual world news and views. Latterly it has become little more than a vehicle for advertising the Metaversed/Metanomics inworld meetings. I’ve been curious about this, wondering why Nick Wilson, the original voice and founder of Metaversed, had all-but disengaged from the site. It seems the answer is that he has been busy behind the scenes. There is a metamorphosis underway in the world of Metaversed, with the emergence of a whole new site – and more importantly, a whole new concept: Clever Zebra.

I know… I know… from nothing 24 hours ago, this is becoming the “phrase du jour” – but I thought you might like to know a bit more about it.

Broadly, Clever Zebra is a new company that will offer companies and others a new approach to establishing a presence in Second Life. At its crudest, the approach looks like an uber-version of the freebies already available to newbies and the financially-challenged in SL. Clever Zebra’s first product, Zebra Corporate, will be available later in January. This “will include the buildings, productivity tools, furniture and landscaping necessary to form a corporate build that can be adapted to each organization’s individual purpose.”

And it won’t cost you a penny. “By providing companies with enterprise class virtual world solutions for free under an open source license… All Zebra Corporate pieces will have full permissions to copy, modify and transfer under the terms of the GNU General Public License version 3. This license allows the redistribution and resale of all or part of the system but stipulates that redistributed copies, whether modified or not, must also carry the same open license.”

Clever Zebra intends to make its money from the services that can be offered alongside, such as customisations, training, support and consultancy.

Won’t this mean a cookie-cutter approach? Well, yes and no. While Zebra Corporate provides a general toolset, it also offers plenty of scope for customisation, branding, layout changes and so forth. And it is worth considering whether “cookie cutter” is such a bad thing. It offers a quick, easy entry point to Second Life for companies that might otherwise have considered the environment too strange – and expensive – to consider. First and foremost, a place has to work as a social environment – looks are secondary.

What about the big building companies? It is unlikely that CZ will have a big impact on the existing virtual world development companies. Large corporates and media groups will still prefer to go the totally bespoke route offered by these specialists. Smaller build companies may well feel the squeeze – but from the conversations I have had over the last 6 months or so, most of these companies are suffering already. I don’t know if this is feasible – but some form of alliance with CZ might actually benefit such companies.

What about artisan builders and craftsfolk? A few people have already voiced concern about the possible threat to existing SL artisans. I don’t see Clever Zebra posing any greater threat than they experience already. In fact, it is part of the company’s ambitions to bring in artisans to broaden the range of objects available under the CZ banner. “By creating a set of standards for Zebra Corporate, including measurements, content, and quality grades, we can invite the creative community to build to those standards and submit variations of the corporate theme for inclusion in the Clever Zebra collection.”

Artisans should benefit from commissions, promotion and direct engagement with enterprise clients. CZ will also offer to help with profiles, contracts and freelance work – in effect acting as an agency.

In the hyperbole coming out of the site all of this is described as a “paradigm shift”. I’m not sure I would go that far – but I do think this is an interesting, new approach for bringing companies into Second Life. The low cost may well attract a large number of new companies to try their hand.

And perhaps here’s the rub…

The business model, in large measure, relies on selling people’s time – time for customising, time for training and support, time for consultancy. Unlike virtual products, which can be sold over and over without any further intervention, people’s time is not a scalable commodity.

Fundamentally, CZ needs to sell time, and that means having bodies, and that has all manner of ramifications. People are expensive. People need to be trained, managed and paid. How do you scale up quickly if there is high demand? In fact, how do you tune resourcing according to peaks and troughs in the market? Sounds like contracting to me.

But it goes a bit further than that: How do you ensure consistent quality? How do you ensure the CZ brand values are preserved? This starts to resemble the Virgin business model. It requires investment in the contractors – and governance mechanisms that allow CZ to monitor quality and conformance.

A final thought is around winning business. The costs associated with bid management, sales and marketing can be high – and the time these activities devour is time that cannot be readily clawed back from charge out. I know this has killed other small companies in SL.

The calculation of running costs, incorporating these and many other factors, looks to be highly complex and full of assumptions. Coupling this with an industry-standard per capita charge-out rate leads me to believe that making a profit will be a real challenge with this model.

I wish CZ good luck with this venture, but I think they need to work through some of these issues if they are to survive (but then, I’m not an open source zealot).

PS: I am glad to see that the "meta" prefix is noticeable by its absence. Here's to a meta-free '08!

19 comments:

IYan Writer said...

Well, I wanted to post a blog on CZ, but it seems like I'll just make a link to this entry, as it would have been nigh-on identical.

I have the same two concerns:
(a) the open-source added-value reseller strategy failed almost completely in RL
(b) revenue-generating activity scalability

I think that perhaps a more clever idea would be to establish a product/service brokerage - sell outside time as well as builds and charge a percentage. Serve as a certifying agency guaranteeing a level of quality.

Peter Haik said...

"Meta free 2008"?!?!? That sounds terrible! :P

Digado | Mapping the Metaverse said...

Good overview, I've listed my own 3 concerns as:

1) The template formula doesn't really work for experimental (SL is still experimental) companies unless it really adds functionality (such as wordpress)

2) Its not free if customisation and land still need to be budgetised. Still a big obstacle for Clever Zebras main market.

3) The businessmodel resembles the 'mash up' model, something that either failed or has yet to take of on the 2d web.

I also listed 3 positive things on http://digado.nl/clever-zebra-the-open-source-office.html as I do think it's a step in the right direction. Perhaps the Geocities of 3d web ;)

Aleister Kronos said...

Peter... "Metaversatility" excepted, of course! :-)

HatHead said...

I guess I am a little dense but I can't see how this is anything more than a buzz-word compliant consulting shop using pre-fabs. And unless they are providing free land, it ain't "free".

It is great though that as a competitor I can still use their assets for free! Now that's clever ;)

Anonymous said...

First 10L products from ASC after VC pays the bills.
Now "Free" products from Clever Zebra that they wont pay others to resale while they search for 6 figure salaries on a 8 figure Evaluation by a 28 year old blogger turned VC.

Well you get what you pay for. Thats the first rule of business for anyone IN business, not blogging about it.

From Bloggers to VR Industrialists?
Clever Pyramid Scheme.
Clever missuse of "Open Source" meme.

Aleister Kronos said...

Anon...

Ouch! I am renowned for my cynicism in RL, but I do hope you are wrong about this. As the comments at http://digado.nl/clever-zebra-the-open-source-office.html show, the debate moves around a lot.

Josh Eikenberry said...

@hathead you're more than welcome to use our products, as long as the changes you make are GPLv3 compliant. Which means your contribution to the project must also propagate out into SL. :)

PortSeven said...

Josh aludes to a good point there, the GPL v3 is the latest and arguably most controversial of Mr Stalma'ns licences, lots of things in there around DRM, and Tivoisation of stuff.

It might be worth having a read of GPL v3 to see if it really is appropriate for this sort of thing, i.e content rather than code. I suspect some sort of creative commons license might have been more appropriate.

Josh Eikenberry said...

@portseven we actually did look at Creative Commons (that's what I was rooting for initially), but there doesn't seem to be enough differentiation between commercial use, noncommercial use, and "approved" commercial use. I could be wrong. :)

Lem Skall said...

@josh, I am also questioning the use of the GPLv3 license and how it applies in this case. What is really the source code that is CZ is offering with their products? Are individual objects covered by the license or are only the assembled builds covered? In other words, is every chair covered by the license or only an entire office is covered?

The latter case would imply that the chair is part of the code for the office. The problem with that seems to me to be that someone could get the office for free with all the rights and redistribute the chairs under conditions that may be very difficult to control. Will that not flood the market with an huge amount of high quality furniture and buildings freebies (and that may not even be the worst case scenario)?

If the individual objects are covered by the license then that raises some much more complex questions. First of all, as I already said, "what is the source code of the chair?" If a sculptie is licensed this way, will CZ also provide whatever source was used in a tool like Maya to generate the object? Once that source is released and can be modified, after how much modification can a new object be considered and proven to be a modification of the original one and still be under the rules of the license?

Using an open source license for builds also raises questions in my mind on how you are planning on compensating contributors (that normally doesn't happen in in OS software). Let's say that I take a chair from CZ and modify it by changing the texture and then submit it back to CZ, competing with with the original chair. If my modification makes everyone choose only my chair instead of the original one, does the original creator get any compensation even if his chair doesn't sell at all? Do we share the compensation? If so, in what proportion and how do you value his work in comparison with my simple change of texture even if the texture makes all difference in the number of copies used?

Now that I think of it, does my texture get covered by the GPLv3 license too then?

As a matter of fact, how do creators of objects get compensated anyway? Is it a flat amount independent of how many copies get used? They're all given for free after all. Or is the compensation proportional to the number of copies?

I am looking forward to some answers.

HatHead said...

@josh. Al seems to have rejected my response. I will move it the CZ forum and my attentions elsewhere.

Aleister Kronos said...

@HatHead

Apologies if I've blatted a comment. I have not disallowed any (so far) on this thread, and there's no comments outstanding awaiting moderation, so if I have barred it, then it was a mistake on my behalf.

That said, it probably would make sense to move the discussion to the CZ forum. Though there are those who would maintain that wherever these discussions take place, they only serve to provide CZ with effectively free consulting.

Aleister Kronos said...

@Hathead

I've just checked my email history. I only have 2 comments from you listed - and both have been published.

Lem Skall said...

@Al: I had the same thoughts anout moving this discussion to the CZ forum, but I am reluctant to join it in any form (even as a critic) before I have a clear view of this venture.

Besides, whatever discussions we have there may again disappear in only a few months just like all the material on metaversed.com. :P

Josh Eikenberry said...

@lem has some excellent points that I frankly don't have the answers to (I'm the creative guy, not the business guy :) ).

We had a conversation in-world, and it continued to raise these great points. Lem is, therefore, awesome.

The basic gist is that with the GPL, we're going to have to set up some sort of line where contributions to the "zebra index" (the place where corps can pick setups, and thus where freelancers get commissions) have to be of a certain contribution amount... ie an entire set of furniture, as compared to a single, re-textured chair.

He also brought up some points about percentages... ie what's the commission percentage on a furniture set that's just a different texturing setup? What's the commission percentage in general? (we're working on that)

And finally, what, EXACTLY, does the GPL license cover? Every single prim, or every single object?

I'm poking my partners to see if they can answer these questions better... Apologies. :)

Lem Skall said...

@josh/lordfly: I appreciate what you're personally doing and I appreciate your contacting me and your talking to me in-world. I am also looking forward to discussing this more.

I am afraid to say though that I still don't have a good feeling about how CZ is using open source. There are businesses that have been built on top of open source projects but only after the projects had been going on their own for a long time. There are also businesses that later opened projects to open source form, like LL is doing it, but that's been done after the businesses had already built solid projects on their own as a foundation.

You guys however, seem to use open source in order to build your own personal business. IMO, that's not what the open source movement is about. My feeling is that you guys are taking advantage of open source and of the spirit of collaboration that exists in SL. I'm sure I'm not the only who feels some resentment from that, especially after metaversed.com is closed the way it is, despite the fact that a lot of other people contributed to it as it was also built through the same kind of collaboration. I personally didn't put much into it (I had one blog entry that I think was pretty good though and some comments) but it bothers me even just to see it happening.

In a way I hope that Clever Zebra becomes successful, as it may be a good thing for SL. On the other hand, I have very mixed feelings about it because of the way you are going about it. And it could also be bad for SL. And there were too many people who supported Ginko too, because they thought it would be good for SL.

Aleister Kronos said...

Prokofy brings Prok's unique, personal and interestingly nuanced perspective to the debate:
http://secondthoughts.typepad.com/second_thoughts/2008/01/a-horse-in-stri.html

HatHead said...

@Al - thanks for checking for my post. Perhaps I clicked preview instead of submit. I have too-fast fingers sometimes.

The question really did require an official type answer anyway and so better asked on the CZ forums.

Cheers!