(Second) Life after Ebbe

The late Ebbe Altberg at the 2015 Web Summit
The late Ebbe Altberg at the 2015 Web Summit in Dublin, Ireland – Image Credit: Web Summit

The first weekend of June wasn’t a good one for Linden Lab, Second Life, or for anyone who cares about either of them. LL’s CEO, Ebbe Altberg, passed away on Friday. His passing came as a shock to most people, although there was a certain amount of speculation, triggered the fact that he was largely absent from all sorts of social media during the past few months.

As we should expect, discussions as to who his successor should / could / will be, or – at least – what properties the new CEO should possess have already started to sprout like mushrooms on ageing trees in a damp forest. I can’t say such discussions are to my taste; for one, I think they started too soon, at a moment when others, closer to him, are still trying to deal with his passing. Furthermore, I find flaws in the more popular approaches, and the less said about the quality of discourse, the better. The popular argument says that the new CEO needs to be a long-time SL user, who has garnered a good deal of experience with the platform. The reasoning is that a CEO that is selected from the user base is somehow more likely to “get” Second Life than someone else.

I don’t agree with this point of view. The user base, much as many people like (I don’t) to call it a “community”, is actually extremely fragmented and consists of multiple subgroups, subcultures, and downright cliques, often with differing, or even conflicting, interests and goals. This, of course, means that there’s no guarantee that a user chosen from this SL subgroup will care for the other groups, or for the benefit of the company, its staff, or SL itself. Likewise, there’s absolutely no guarantee that this user will know how to run a company, how to plan and manage a single project, much less multiple concurrent ones, how to handle investors, the Press, and whatnot. Finally, there’s absolutely no guarantee that the “experienced SL user” will have any idea about how to be a leader. I, for example, don’t think I do.

Have a look at Ebbe’s tenure with LL: if anything, it demolishes the notion that extensive prior experience with SL is de riguer for someone to become a good LL CEO. Ebbe was by no means a “long-time SL user,” as he himself had admitted on several occasions. However, he was anything but oblivious to its existence and what people can do with(in) it. After all, he was a close friend of Jed Smith, former chairman of LL’s Board, he was an early beta user, and his own son had been a user of the Teen Grid.

Still, as I noted in my retrospective / tribute, his tenure, although certainly not perfect, was highly successful, and he rose to become LL’s most-respected and longest-serving CEO. In fact, many people, including yours truly, consider him as the best CEO LL ever had. But, since he wasn’t a “long-time SL user,” why was he successful? This comes down to two factors: the brief he was given, and his personal qualities. Of these, the brief is the most important – the qualities are determined and sought after the brief has been set.

But what is the brief? One needs to always keep in mind that what we, the users (i.e. the customers), may think is best for SL isn’t necessarily what the owners of the company want to do with it. Remember, a CEO is hired by the Board of Directors, answers to the Board, and can be fired by the Board. And the CEO is hired to carry out a mission – the brief. The CEO has goals to meet, and can be kicked out, with or without a golden parachute, for serious missteps: you just have to remember the unceremonious sacking of Steven K Lee by famous high-end maker of optics and photographic equipment Leica Camera AG in 2008. A similar example is how the problematic HP-Compaq merger masterminded by Carly Fiorina led to the Board ordering her to fall on her sword (she later went on to become a deplorable shill for the worst conservative moguls). So, while the CEO yields tremendous power over the company, and may reshape (or at least attempt to) the company according to his or her vision, even a CEO isn’t immune to the ire of the Board.

In previous times and in similar circumstances, we’d be expecting the new CEO, knowing pretty much that his or her mission would be to continue improving SL as best (s)he can, keep its balance books healthy, etc. But now, the Lab is no longer independent, but part of the portfolio of an investment group led by Brad Oberwager and Randy Waterfield. I’ll admit I know very little of their previous ventures and what they did with, or to, them.

I’ll be entirely open: in general, I’m very leery of investment groups and big takeovers. I’ve seen many investment groups and / or conglomerates treat their acquisitions the way a salvager treats cars. I’ve seen my investment groups and / or conglomerates come in, not knowing what they’ve acquired, what it does best, what its real strengths and weaknesses are, and, in a drive to “maximise shareholder value” (the mantra of Milton Friedman, the dismal science’s Trofim Lysenko) and do so yesterday, ruin it and drive it to bankruptcy, near-bankruptcy, or infamy and ridicule. I’ve also seen starry-eyed, enthusiast investors with supposedly deep pockets step in, but fail, due to a lack of actual knowledge on how to run the company, due to overinvestment in money-pit pet projects, and / or due to a lack of meaningful funding.

This is why I didn’t share the widespread, quasi-obligatory enthusiasm (sincere or feigned) about LL’s acquisition by the aforementioned investors. Instead, I chose to hold out until I see what they’ll actually do, and I still stand by my decision and position, basking in my “party pooper” reputation.

Now, what Oberwager and Waterfield have added in their portfolio is a reasonably healthy, profitable, well-focused (after the axing of Creatorverse, dio, and Versu, the phasing out of Blocksworld and Patterns, and the sale of Desura and Sansar), company, with an admittedly small, but very dedicated and diverse, user base for its core product. Also, – thanks to Ebbe’s sharp business acumen, the Lab has an additional stream of revenue in the form of Tilia Pay. Ebbe’s tenure has also seen several crucial (many of them overdue) updates in SL’s technology and its infrastructure that make it look, work, and perform better and more reliably than before.

However, it’s a company that faces serious challenges. For starters, it needs to keep investing in several aspects of SL’s codebase (especially its 3D engine) as heavily as “AAA” game studios. Despite its relatively small workforce, it’s a high-maintenance company, because it needs very highly-skilled people. Here lies one of the most crucial questions: do Oberwager and Waterfield have the wherewithal to hire the necessary people and fund the necessary updates and upgrades? Do they have the willingness to fund them? Or are they going to be like Peter Livanos and the Papanicolaou brothers from Aston Martin’s Victor Gauntlett era?

And what do they want to do with SL? Will they tell the new CEO to build upon Ebbe’s considerable legacy and take SL further, or will they tell him / her to merely cut expenses, make the company look profitable, and then prepare it to be sold off to some other group of investors or, even worse, to some huge, creeptastic, company hell-bent on pleasing the rabid conservative nutjobs like Verizon or Facebook? I believe these are the questions that really matter, not whether it’ll be best to hire one of us, the users, or someone outside the company.

One thought on “(Second) Life after Ebbe

Comments are closed.