Loving the Land by Katya Dirval
This journey has been a winding one. I discovered Second Life® while I still had a passion for making music. My first business was a club, but I quit because we had to move a few times, and all the store owners got tired of that. I met a lot of people though, and most lived on the very first sim we acquired later. It was a great learning experience!
Next I found a passion for building but also wanted to make money. So I started K Di Designs. My dream was to have my own sim, packed with my interior and exterior designs, surrounded by themed homes which I personally built (that reminds me—I still haven’t boxed any of them!). But for that business, the profits were nothing to write home about. The design market is over-saturated, as many people can build and place their items online without having any upkeep costs. Some creators are even long gone from SL but still have their stuff on Marketplace! With great competition in design, it is tough to make money. The people in the design business who make the most money are not the designers but the those that supply the designers with animations, sculpts, or scripts, as templates.
Property is the foundation of everything—all is built upon it. The most important thing in a virtual world, you can’t login if there is no land.
At the same time I was working in design, I became deeply involved with W Real Estate (WRE), founded in 2008 by Acidelic Weezles. He re-rented parcels for a landlord, and after a while, started renting his own sims. He built up a small empire, and when I got involved, it grew to be very profitable. So I changed priorities and joined it as my main business. We have now have over 500 sims, and hopefully still a lot to more come! K Di Designs is more of a hobby. (My most recent creation was an ice cave last year for Marketplace as a free holiday gift.)
As part of WRE, I formed VLex to supply residents with Lindens in case they had any billing issues. I get more in return by selling Lindens at the buy rate and not making a profit, compared to selling at the Lindex rate and taking a loss. Most people pay tier in Lindens so we have to convert to USD. But this conversion always loses money. For example if you buy 1000 Lindens now it costs $4,34 USD. But if you sell 1000 Lindens you get $3,90 USD in return. If you sell people Lindens at the same price they would pay Linden Labs you save from a little loss overtime. So this is a win/win opportunity for everyone.
I started Kitty Kat (Breedable Tigers) because it actually supports real tigers in the wild. I contribute to the IFAW in real life (protecting wild animals, freeing captured animals, or helping homeless pets after nature disasters etc.). It feels like duty to help here too. The tigers do not make much money as I don’t have time to go to auctions. But it is for fun and for a good cause, so I don’t mind. Same as my K Di Designs, it will give me something to do again when my business is slow around major holidays. I at least check my tigers once a day, although sometimes I forget and they almost starve to death!!
Then there is my favorite project of all: Lovers Delight. It is not a business, but my gift to the SL community. I’m a sucker for romance and love this full sim, beautifully landscaped in a medieval/fairy tale kinda setting, where people can just come together, meet others, or go there with their partners and explore. It is an island away from the malls and ad spam usually seen on full sims that need to make money. Many visitors to Lovers Delight have actually found RL partners, or met there and married in SL. I hope anyone looking for meaningful romance will check it out!
Acidelic comes in once or twice a day to manage the rental boxes. Like me, he does much of his work in Skype. Whereas businesses often fail due to drama in management, Acidelic and I think the same; we never have conflicts. The only issues we deal with might be with staff—never with each other, because we both just want to make this work. Our hardest challenge is keeping the staff happy—maybe that distracts us from getting in each other’s hair!
Currently with about eight staff members, only five are very active. The smaller the staff, the more money they can make. I have seen estate companies allow just anyone to become a land agent, and in the end everyone only gets a little. This is not motivating. Some of my managers actually make enough to not need part time jobs in RL. Instead they can just have fun on SL and work from home. Half our staff is from Europe, and half from the US, to cover time zones.
I love building the most, but our real estate business became so big that it turned into a responsibility. There are days I just want to hide from everyone. Yet I do love my regular residents and my staff, and this is what mostly keeps me going.
I am an extreme workaholic. My shift ends when all work is done, and sometimes I don’t get any sleep for days! I mostly run my business in Skype and email, so when I’m not in-world, I am available for staff and most valued clients until I go to bed. Even when I’m in bed already, and get an important message on my phone while I’m still awake, I often get up to open new sims or add/remove estate managers, if urgent.
Experience comes from trial and error, losing money, and investing time. Just like in real life, meet people that you can learn from and who will inspire you. Of course, during the journey, there are people where things don’t work out. But in the end, even those people mean a lot, as I learned from them what doesn’t work for me and what to avoid next time.
If new in real estate, do not be naive about making profits on your first sims. It takes a long time before you build up a large enough customer base to keep your islands occupied.
It is a very bad strategy to think an empire can be built quickly by undercutting competitor prices. This may rapidly fill up sims with people who don’t value land, as it’s cheap. They don’t mind easily ditching it again. Also by expanding too quickly, people can get behind on payments, leave you with debts and empty land. You will probably never recover from even the smallest losses, as your prices are too low. This will run your business into the ground. Not only do you hurt yourself by using cheap and easy strategies, it damages the market in general by exposing buyers to nonsense prices that they think are today’s new standard.
Unlike owning a local store or office in real life that runs from 9 to 5, to have a profitable business in SL, be prepared to work your ass off! It is a 24/7 economy, and competition comes from those living in different time zones all over the world. It pays to be humble, generous, and fair—even to those you don’t like. For most people, SL is a game. So greedy attitudes do not make many friends, nor will keep customers. When you’re into real estate during the summer months, the hardest challenge is to survive, rather than make a profit!
During my first months as a noob, I bought Lindens from third party resellers. When I started making a profit, I used it to keep expanding instead of cashing out. For a very long time I never saw any money coming out of SL into my real life bank account. Perhaps I am lucky that I didn’t need financing in real life at the time, so I could just keep on using it as “play” money. Now profitability comes from renting out full sims and homesteads. The parcel business can be pretty good too, but most of that money goes to staff each week.
New entrepreneurs soon notice that business ideas/approaches that can be effective or reliable in real life don’t work in SL. This was one of the first things that hit me in the face when I started my own club.
I was convinced that a mega club with the most expensive equipment, and built by professional builders, would draw a huge crowd. Also I hired DJs that were actually DJing in real clubs. And I thought people would pay to enter my club. This was an epic failure! I quickly found out popularity was not about hiring great DJ’s, it was about hiring those with the most friends! And my expensive equipment turned out to be a huge lag issue, so I was better off without it. Quality skills/builds do not fill a club—people with lots of friends do. Even when advertising upcoming events, the club just stays empty unless there is a social network supporting it. Of course the DJ must have a mix of some skills, but mass teleports to a massive Friendslist are more important than knowing how to properly sync and fade one song into the other.
Many hardcore users of SL are people without jobs in real life. If the economy is bad in real life, the economy is even worse in SL. If people don’t have money, they don’t have money. To offer crazy prices for boosting sales has very little effect, and might even ruin things in the long run. It is best to wait and let things recover, rather than panic and drive market prices down to a point where it might never recover. Instead, aim for more or better promotion to bring in those extra sales.
Our promotional strategy is pretty standard: rent ads here and there and post classifieds. But best is mouth-to-mouth referral from our residents. That’s why we aim to be the best in customer care instead of trying to be the cheapest in SL, with no budget left for support. Selling your reputation as someone who cares works better than showing the lowest prices; there’s too many people already doing that and most never last long. The worst part is, they often take their renters down with them, as they can’t afford to refund.
Be kind and people will stay, come back, or refer friends. Combine this with a fair and healthy profit margin. After several years, when you’re still in business and known for being reliable, you will have a great customer base.
I try not to look too far into the future. All businesses in SL depend on the success of how well SL does in general, and what LL does specifically. Not all efforts are improvements, such as LL changing contracts every six months—not to mention the stunt they pulled last year when giving away sims at no setup fee! Such factors have a huge impact on realtors.
It is a challenge to expand with more sims while the user base has been shrinking for the last few years. The way to grow in such circumstances, is to watch others go out of business and pick up the customers they leave behind.
To sustain takes diligence and many hours of monitoring! Time is money. Empty parcels, empty sims, and people not paying rent on time equals money down the drain. We work almost around the clock to minimize those losses on all our sims. There is stress when racing against time to make enough money to pay tiers, and have a profit left at the end of the month. Real estate, in general, must be one of the hardest and most stressful challenges in SL!
People skills are important when running a growing enterprise. It is easy to have misunderstandings when just exchanging text. Don’t be too naive. It is very easy for people to lie in a virtual world. If you trust them too much, you will likely end up losing money. Keep an open and creative mind, with a good business insight.
My work on SL is pretty much my real life. I had been unemployed in real life when I began my SL career. Now I work almost sixteen hours a day (not nonstop but I have to be around) and seven days a week. Even indoor hobbies like making music or playing games are on hold at the moment. I also have skipped some vacations, because I was afraid of what would happen if the promised internet wouldn’t work. I guess I became a prisoner of SL. Probably a lot of people with serious businesses in SL feel the same way.
Changes made by Linden Labs, or as a result of other people’s actions, will often force you to reinvent your business model. When running a large operation, know what reactions your actions can have on the market. Just like in real life, market prices from smaller operations are often adjusted to what the large and popular operations offer, while other well-known giants fight to have the best deals possible. If not careful, you could kill the entire market, and nobody will be able to make anything at all anymore.
I love to work from home and not need any real life job, or have to follow the hours someone else decides. There are days that I may not log into SL at all, and just talk with staff on Skype. I will login to IM, or add an estate manager, or open a new sim. And if things are hectic, we can work in-world for weeks with very little sleep! On normal days, I am not in-world longer than an hour. I can take my staff and my email with me on my Blackberry, and instruct them from anywhere. However, I prefer not to be too far away from a PC or notebook, in case I have to login to deal with issues or help staff.
I can escape if I want, but for some reason I just can’t—it eats on me if I’m away from a PC, knowing I might not have any control if something urgent comes up. Guess I’m a control freak! My sleep pattern is messed up compared to normal standards where I live in Holland: I often sleep when normal people are working. I’m active when Europe has time to be on SL. I’m here when the US wakes up until almost midnight SLT. My pattern covers the most important business hours on SL.
Another reason that I work so hard is to know that my efforts are good for something—to see and hear that people are happy. They feel at home in our estates. I love hearing how my Lovers Delight sim brought those from far away together in real life, and how happy they are now.
Don’t go into business just for the money, or you’ll become frustrated and quit. Love what you do. SL is no longer a place where you can just roll in and make easy money in a day worth cashing out. Take time to learn, and meet interesting people. Don’t give up when one thing fails. Keep your head up and try something else until you find the right combination. Be good to everyone, and karma will reward you with success. If any readers are interested in going into real estate, I’m more than happy to guide them into the right directions and help them setup.
This article had an earlier version published in Bowler Business Review.
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