The Business of The Game by Skip Oceanlane
Skip Oceanlane provides a background and an overview of the virtual stock market. Readers, with some understanding, can enter the active and vital exchange with confidence, and even gain experience that can be applied to real life.
All participants in Capital Exchange share a belief in the potential of virtual business. Riding the roller coaster of development is a part of the journey, gaining experience through every transition. Skip Oceanlane has firm hands on the reigns of development, and shares his dedication. Any visitor to Capital Exchange will usually find Skip’s avatar perched on his stool at the Information Desk—though behind this representative, his RL fingers are busy doing business unseen. Rather like a wizard behind the curtain, Skip has led Capital Exchange to its leading position because of trust earned. In the financial world, performance speaks. How it is measured becomes the personal brand of each contributor. Capital Exchange forms a community of shared interests that propels business growth. Inspired participants know that SL is not a game, but a place to fulfill ambitions.
Permeating every sector, influencing every investor, and contributing to the overall virtual economy, Capital Exchange leads the financial market in Second Life®. At it’s helm, Skip has an iron hand that keeps all running smoothly. With experience to translate into longevity, Skip learned from the tumultuous history of virtual stock markets and has the formula that works. Though he likes to make a linden profit, he likes to make a difference more. Of the companies trading at Capital Exchange, their growth rate and longevity matches. —Eleanor Medier
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THE BUSINESS OF THE GAME by Skip Oceanlane
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EVOLVING WITH THE VIRTUAL WORLD
A real life news story in 2007 talked about how there was a virtual world filled with people who can buy things using a virtual currency. So I joined and was hooked on Second Life® immediately. At first, I worked for a SL bank, then a land and loan business. I saw that people could make a profit.
I started trading stocks when I was twelve through my father. I learned that my money could work for me, and I could make a profit. But that is not my real job today. Rather, I work for the government as a safety/building/security inspector. Also, I own a day spa, and work in public service; I have many jobs. We keep busy in New York!
Fascinated by SL real estate, I started with just one sim in 2007— Crystal Springs. I sold it out quickly with renters and landowners. So I added a second one, third, fourth, fifth,…I got up to fifteen of my own sims which were 90% rented out most of the time. Soon I helped others buy sims by loaning them the lindens, buying the sim for them, and transfer to them once they completed the payments. I also ran a small bank—Crystal Springs Bank.
So in SL, I made a good profit in 2007-2009, but unfortunately back then, most companies listed on SL stock exchanges failed. There was too much fraud. Then when banking was banned, and people lost millions of US$ in lindens in more fraud, that added to the losses. So then, I just concentrated on Crystal Springs Land and Loan, and eventually building to 100 sims. When the land situation in SL declined, I didn’t have $195 US tier sims, so I couldn’t compete with large land barons. By the end of 2009, I closed down Crystal Springs Land and Loan and left SL, for a while.
In late 2010, I came back to see how everyone was doing. The stock exchanges were dead. After talking to a few of their owners, I saw an opportunity to make things come back. So in January 2011, I bought Capital Exchange from Scott Nestler. I combined companies from five different stock exchanges, instituted all new rules, and banned the scammers. Also, I did my best to be a regulator and provide a fair playing field for everyone at Capital Exchange.
Now, I’m at the exchange HQ as much as possible when in-world—sitting at the Information Desk. My IM’s come via BlackBerry to help customers when not online. I even went on vacation to Aruba for nine days recently, and I signed on daily to help customers. So, whether I’m in-world or offline, I can provide customer service almost 24/7.
We are patient new customers learning about stocks. Things are usually confusing at first. I often assist someone that is only going to spend 100L or 200L at a time. But I enjoy helping them learn how a stock exchange works, and often small investors get comfortable enough to invest larger amounts later.
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I try very hard to do the right thing here. Other people that run stock exchanges lack ethics, and shouldn’t be doing so. Some past owners of SL banks and SL stock exchanges belong in jail for what they did, in my opinion. I can’t right the wrongs of the past, but I can try and help stop them from happening again.
THRIVING FROM BOARD INFLUENCE
Success is being able to compromise with others, without compromising principles. There are some things that I refuse to change, and other things that I go along with, that others want. I just try to find a balance.
The Capital Exchange Regulatory Commission (CERC) is comprised of eight people that I appointed to help run the exchange. I selected a wide-variety of those who are willing to volunteer their time to serve, who are going to make a positive contribution to the exchange, that want to be involved here, who are honest, and who truly care about the shareholders. It’s not a paid position and we don’t have meetings. We do everything via forums, chats, IM’s, and posts. There are no time limits on terms. Sometimes people resign for personal reasons, like if they are leaving SL or are too busy to fulfill their duties, but overall we have had very good stability with members serving.
Our votes are usually not unanimous—and we often don’t agree! And, there are even times that I am outvoted. We might fight like crazy! But, we are all passionate about our ideas and doing the right thing. Each of us brings something different to the table, which is why we are successful where other exchanges have failed.
There have only been a total of twelve CERC Members since I started. We have people from all over the world, and I greatly value their time and energy, especially when drama pops up—and with this being SL, drama is always here! Unfortunately, there are people that deliberately just come here to try and cause disruptions. I just try to solve the situation as best as I can, and move on. When lindens are involved, it often attracts trouble makers. It’s not always easy—there are a lot of selfish people out there, including scammers trying to steal from other people. In this anonymous environment, it’s hard to combat fraud. Often, many scammers just change their avatars once they get caught. But, we do the best that we can to protect shareholders.
REASONS TO TAKE YOUR COMPANY PUBLIC
We help companies get new customers and allow business-minded people to help one another. Companies face stiff qualifications to go public and list with Capital Exchange. It does take work to qualify, but those willing to do it will definitely reap the rewards (and the profits) of being listed. Like anything, hard work and dedication will pay off. If everyone wanted to follow the rules, it would be incredible, and it would attract thousands of new customers!
The potential for virtual stock trading is limitless. Theoretically we could have 1,000+ companies listed, just like the NYSE! But they have to be the right companies—the ones who can use capital for growth. Determine if these benefits will help your company. Even with unlimited potential, the standards for listing are rigorous. As SL matures, leading business owners discover how to grow from financing options opened up by becoming public. The opportunities for all become more fulfilling as more participate.
We look for companies that are existing, that have a verified track record to show they are trustworthy. For companies wishing to list, everyone is welcome to apply. If you have tangible assets, a respectful reputation, and the ability to generate profits for investors, we’re the place for you. Benefits for listing include the opportunity to:
1. Sharpen your market concerns and increase visibility grid-wide. Balance your need for lindens with how much capital you can raise. This is an opportunity to sell your ideas to investors.
2. Evaluate priorities, sharpen focus, and evolve. The market inspires business savvy.
3. Gain exposure. Raising lindens can give a faster advancement to ventures. With almost 18,000 accounts, and a website ranked above 75,000 in world in traffic, new customers are attracted easily. When a company does a news story on our website, tens of thousands of people see it.
4. Maintain your own management while gaining feedback and assistance from those with other expertise.
5. Use investment capital to grow. Take business to the next level. Many new or spinoff enterprises become possible because investors can target and grow portfolios while they enjoy the action. Use for promotion. Advertising opportunities are limited—there are thousands of sims. It’s very hard to get the word out about places in SL. There a lot of competition. Capital Exchange offers a lot of free advertising options.
6. Control overhead. Having observed the performances of about one hundred successful and not so successful virtual companies, I have seen the extremes of stellar achievements and spectacular failures. I’ve owned over 100 sims in my SL years, been witness to the rebirth of an industry, and monitor change. Here are words of warning to those building companies: Bigger isn’t always better. Making a profit is what counts. Keep your expenses low, and do something yourself whenever possible. Relying on others can often be risky.
7. Create tangible goals. Stay ahead of your business by measuring assets and monitoring reputation. Generate profits. Keep these in balance for directing decisions.
8. Communicate with shareholders. This strengthens investor confidence and can gain feedback from professionals supporting company success.
It is harder to find companies to list than the investors. Many are hesitant to list. They don’t wish to share profits or take risks of using other people’s lindens. They want to remain private, and for some, that makes sense. Many companies that want to list don’t qualify. They might be new with no assets. We don’t list companies like that. The risk here is great enough. We try to find companies that have a track record of profits, and a good reputation. I do my best to attract CEOs and companies that will be honest, pay a dividend regularly to shareholders, and thus alleviate their fears.
Listed companies should keep doing the best you can to generate a profit, work hard with good ethics, and be good at what you do.
MAKE A PROFIT AT CAPITAL EXCHANGE
Real money can be made by experienced traders. With many thousands using the website daily, the activity is inspiring. Company owners have more opportunities to build their companies with this support. The traders can earn while learning strategies that also apply to the real world. Collectively, we raise the bar of virtual business. The stock market offers any resident a chance to earn lindens, and make a difference. First, gain some background. Secondly, determine simple strategy. For a wise approach to making a strategic profit at stock trading:
1. Learn the difference between Market and Limit Orders, etc. Choose one of two methods for managing each stock:
a. buy stock low, sell it higher.
b. hold to collect dividends that are paid from profits. Just like a real life stock exchange, only some companies pay a dividend. If there are no profits, there are no dividends.”
2. Research a company before investing. Understand what they do and how they have performed in the past. The goal is more than just profit. (See www.slcapex.com for company descriptions as a place to start). By aligning with a purpose, the investor also contributes to an entrepreneurial dream. Few business owners are ambitious to just make money. All have something they wish to build, to learn, and to contribute. See what need they fill. Investing also involves investigating—backgrounds, strategies, performances, and plans. Investors, when learning about performance, can find synergy from their efforts. Although there is no way to predict a traded company’s performance in advance, knowing about their businesses helps to build long-term expectations. The traded company CEOs often retain a majority of their own stocks, thus keeping control of their strategies. But investors do join them in their growth adventures, keeping in contact with regular reports and communications.
3. Guard against losing money. Though there is always risk, there are ways to minimize the risks so that there are more gains than losses.
a. when the value of owned stock goes down. Rather than continue, it may make sense to sell off and find a more lucrative investment.
b. accept some failures. Though knowing the companies and having confidence in track records, some companies will delist. Businesses fail most typically due to not executing a viable strategy or to not using technology in a way that adds value. These common traps can be avoided with sound planning. It does not happen often that a company delists, but it does happen and then the assets give small compensation. This is balanced by stronger investments.
4. Start with a slow strategy. First develop a diverse portfolio while learning the landscape. Learn how trading operates. Ask questions.
5. Learn how to trade properly. Know the difference between a Market and Limit Order. It’s often the difference between generating a profit and incurring a loss. Ask me for help. I do one-on-one training with anyone that wants it, and assistance is not limited to a class schedule. Erik Goff offers regular stock market training classes. The more people that understand how Capital Exchange works, the more people that will trade, which means more trading volume and more profits for the exchange in general.
6. Only invest what you can afford to lose
7. Build skills. Use participation as training for handling real world stocks. Though investing can be intimidating at first, investors can quickly gain confidence within the virtual world. Resources and hands-on help make learning fun. This experience is one of the best consequences. Many people start trading real life stocks because they felt comfortable learning how the market works by trading lindens first.
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SECOND LIFE BEYOND A GAME
Many people don’t understand SL, which limits the people that can trade here. Once people get here, we need to find those with the capital to invest. Many kids use SL, and don’t come here to trade stocks. Then there are people that don’t bring lindens into the game. So we need to find people willing to invest, and companies to list. For each step, the available people keeps getting more and more limited.
Businesses fail in SL because either people don’t take things seriously enough, or they don’t realize what is necessary to be successful. This is similar to real life—many fail in both worlds. The difference is, this is a game. Well, most people think of this as a game. (We’re classified as a game of skill by Linden Lab’s Terms of Service. We use only lindens, no real life currency.) But I see Capital Exchange as a business within a game. Big difference. I run it like a business—a profitable business—within the game of Second Life. Many of us have businesses within the game, so it’s a combination of the two.
SL can be used by all businesses to increase exposure and sales, if they know how to do it correctly. Potential depends on the skills of those running the business. Possibilities are limitless, if someone knows what they are doing.
My goal is to help companies and shareholders connect together in an ethical trading platform, and to make a linden profit in the process. I’ll leave it up to Linden Labs to get people into the game. Then I will do my best with that pool of people.
I make a great part-time income from doing this, and at the same time share thousands of US$ in lindens of profit with CapEx shareholders. It’s a lot of hard work, juggling, and sacrifices—but I enjoy it. There are even times I take off from my other jobs to do work within SL, because I like to help here, and I believe it’s all worth it.
I wish I could say I run a real life stock exchange. Capital Exchange is enough for me to handle!
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(re-edited from the original, published in Bowler Business Review, by Eleanor Medier)
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