Playing With Reality - Episode 4

 

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Episode Transcript

Menno: Back in 2006, the brightest minds in technology all came together to plot out the future of a technology which few had then heard of, the metaverse. These pioneers of virtual worlds wanted to set out a metaverse roadmap, a plan for where they could take the augmented and virtualized universes which were appearing on the internet. This week, I'm talking to a person that attended that meeting, the founder of a company called Metaversum, and to the one person that should have been on the guest list. Yes, the founder of Second Life. Welcome back to Playing with Reality with me, Menno van Doorn, a new podcast series from Sogeti, the home for technology talent.

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It might surprise you to learn that ideas of the metaverse didn't actually start in 2021, when Mark Zuckerberg rebranded Facebook as Meta. In my work, researching the internet, I found out, one and a half decades ago, about this conference, the metaverse roadmap gathering. It was a pivotal moment. The 40 futurist technology architects, academics, and entrepreneurs who were there, attempted to set out a 10-year technology forecast. I was fascinated by this gathering, and the ideas which came out of it, many of which have defined what the internet is today, like innovation being best off if the government doesn't interfere. I wanted to dig deeper into it to discover how the metaverse became the hottest thing in technology today, but already was hot way back in 2006. Let's start with the one who was attending that meeting. Hey, Jochen.

Jochen: Hi, Menno.

Menno: Nice to be able to talk with you about what the Metaversum is all about.

Jochen: Glad to do so.

[laughter]

Menno: Must be going back in memory lane for you, I would say.

Jochen: Well, I hope so. It has been a while.

Menno: This is Jochen Hummel. He was there in 2006, and in the same year, he founded Metaversum, a company who created Twinity, a virtual online world where avatars and their spaces were based on real people and real cities. Jochen has always been usually passionate about virtual worlds and the promise of the metaverse technologies, and he has led Metaversum until 2010. Since then, he has worked in various other realms in the tech space, and is now the CEO of Coreon, and ESTeam, a multilingual AI and LangOps platform. I asked Jochen to tell me some more about this metaverse roadmap and specifically what he has learned from it. I would say, let's revisit a very special conference that you were attending, actually sponsoring also, back in 2006, when you were running a company called Metaversum. Can you tell us something about this, I would say, this historical event in 2006?

Jochen: Yes. It was an event of industry players and multi-world aficionados coming together in California and the Silicone Valley to discuss the future of the metaverse. We were, at that time, just founding a company with the goal of building a virtual world, which is a one-on-one copy of the real world. I wasn't coming from that industry, I did something very different before. I thought it's a very good kickoff, A, for learning what's going on, for meeting people, for getting connected, for also probing our idea. That's why we thought it's a good investment to take some money, sponsor the event, be there, provide input, and also to learn a bit about the states of affairs. I learned a lot and I was happy to contribute to the roadmap.

Menno: Who were actually there? Do you remember the people that were part of that gathering?

Jochen: Second Life, of course, was the big hype at that time, and they made it to the front pages of business magazines, and so they were really the stars. Let's say the executives of Second Life didn't show up, but people who were very active, driving the community and so on. I would say it was a meeting of, let's say, contenders. People like us or other virtual world companies who wanted to build something similar or with a different pitch or a different narrative, but something similar like Second Life.

It was more dominated, I would say, by people interested in tech, and then a few CEOs trying to build a business in that space.

Menno: At this event, the program manager, when she talks about what this is all about and she tried to define the metaverse, she's saying that the best thing that could happen to the metaverses is when governments are not interfering. You were running a company. Do you still remember what your thoughts was back then?

Jochen: Yes, definitely. I'm a tech guy. I'm also thinking, it's the same now with crypto or other new tech developments, that governments can play a certain role, providing a framework. For example, something like GDPR in Europe, which is definitely helpful to lay some ground work. For something as innovative and as new as the metaverse, which was really cutting edge at that time, there's no place for governments, but they can be great customers, of course. I always think that government involvement can be not by trying to control technology, but by using technology, because a lot of things were born that way.

Menno: People are still figuring out what the definition of the metaverse is, and we are 16 years later. Why is it so difficult to define such a thing as the metaverse do you think?

Jochen: The possibilities are endless, with it, the use cases and horses for courses, depending on the use cases, of course, you build different worlds. The other reason is, the tech at that time, and I think it's still true, is coming from the gaming industry. Also, the success. The gaming industry is bigger than Hollywood. It's a very, very big industry. A lot of money has been made so far. Metaversum still need to show, or the metaverses still need to show and prove that they actually can make money. I think that's the reason why actually successful incarnations of metaverses mostly are more games or more platforms for supporting escapisms than doing what is mentioned there, entangling and enhancing the real life.

Menno: Interestingly, Jochen refered to a company who were conspicuous by their absence at the conference, a company called Second Life. They were the biggest virtual world organization at that time, and are still used by nearly a million people through this day. You may remember Beth Coleman, in our first episode, talking about interviewing people in Second Life, for her book, Hello Avatar. To truly understand what the early incarnations of this metaverse were like, I knew we had to speak to the Second Life founder, Philip Rosedale.

Philip is a serial entrepreneur. He founded Linden Lab in 1999, a company which would soon create Second Life, which is an avatar-based online multimedia platform. Its success was huge, and saw Philip put on Time Magazine's 100 Most Influential People in the World in 2007, alongside various other awards.

After leaving Linden Lab in 2010, Philip started High Fidelity, a company which is developing a next-generation virtual reality platform, focusing on specific technologies like spatial sound. Early 2022, High Fidelity acquired an interest in Second Life, so Philip is back on his home turf.

I asked Philip about the start of Second Life and his early predictions for the metaverse back then. I was wondering what you were thinking back then in that year 2006, because the other people were working on something called the metaverse roadmap, and they were looking ahead maybe 10 years or 15 years. What would your thoughts be if someone would've asked you, how will the metaverses look like in 2022?

Philip: First of all, as a timeline on that, you're right. I started the company in 1999. We launched in 2003 and we became famous in 2006. If you would've asked me in say 2006, what was going on, I would've said, "We are a good bit of the way toward everyone having an avatar that they use, some of the time at least, for different things in the metaverse or in virtual worlds. I think the last 20 years have proven me somewhat at least wrong. That didn't happen, and so part of the interesting question that we're all talking about these days is, why was that? I think some companies don't even know the history of Second Life, and so they don't even know to ask the question.

Menno: It's difficult looking ahead. Meanwhile, at the metaverse roadmap gathering, they defined the metaverse. They build a definition basically saying it's augmentation, it's simulation, it's something like intimate, but it also can be external. How would you define the metaverse?

Philip: A lot of different ways. One thing I would say that I think is maybe useful in comparison to what other people say, is that the metaverse, in my mind, first of all, is-- Right now, when people are talking about the metaverse in 2022, I think they're talking about two different structural changes that you can actually separate, and that is interesting.

The first change is moving the internet itself from being two-dimensional images and text to being three-dimensional. Of course, that's a worthy goal, but there's another piece of it, which I think is more important and more complicated and more dangerous. That is taking the internet from being a solo, lonely experience, to being a live multiplayer experience. I think this idea of moving from lonely to live is the more interesting and the more important transformation that we could be about to go through.

Menno: For those who think that Second Life is history, can you give a short update of what Second Life is today?

Philip: Sure. Second Life got to about a million people, being the size of the community, around about 2008 or 2009. Since then, it has stayed at about that same size. It's grown a little bit during COVID, so fast forwarding to today, there are about a million people still using Second Life actively. There is a lot going on there. There are schools that are still teaching classes there. There are thousands of people who make their real-time living, working in Second Life, so that million people community is able to support a few thousand people who work there all the time. That has generated a lot of really interesting data around what the metaverse is going to be.

Menno: Let's talk about that behavior, that virtual life behavior. I think you are also a virtual anthropologist. What have you learned in all these years about human behavior, looking at what people are doing in Second Life?

Philip: Right. As a result of Second Life existing, there's now been a lot of academic studies on what we're about to talk about. There's a couple of really important things that happen that are really interesting. The first thing is that when you have an avatar, you project your body and your identity into that avatar in a way that is really quite interesting. One way of putting it is, you can't tell the difference between your avatar and yourself. For example, when someone is within arm's reach of you in the metaverse, it activates the same neurological response, which is this thing called your peripersonal space. When somebody's close enough to touch you, your brain lights up in a certain way. When someone's close enough to touch your avatar, or another avatar is close enough to touch your avatar, your brain lights up in the same way. The belief that you're in a space with another person, fortunately, is possible to simulate with avatars.

There's a second thing about avatars that's really interesting, and this one you can look up on Wikipedia because it's called the Proteus effect. The effect is, having an avatar tends to change your own behavior as a result of the avatar's behavior, which is a very unusual finding. For example, if you watch your avatar workout every day, if you take your avatar and you have it run on a treadmill, it makes you more likely to run on a treadmill, again, because your brain can't see the difference between the avatar and you. The avatar is very plastic, it's very easy to change. When you change something with the avatar, there's this reflective thing that happens where you tend to change your own behavior to match that.

People can do things like become less introverted by communicating with people more socially as an avatar, and then that change reflects on their real life. This is obviously a very potentially positive thing.

In Second Life, it has been a remarkably positive thing.

Menno: Philip stressed these positive impacts of Second Life throughout our conversation. That's how both he and Jochen founded their different virtual worlds. In 2006, these companies were made with high-minded intentions, intentions to make generally positive impacts on the mental health and the real lives of the users. It's a mindset which was shared by many in those early days of the internet. How did they get on with these goals? How did they seek to implement these ideas in the running of their businesses? I went back to Jochen to find out some more about his company, Twinity, which was a similar idea to Second Life. I wanted to know how he put it together, what happened to it, and about some of the successes and mistakes he made along the way. Can you tell me a little bit more about your company? It's called Metaversum, there's a platform called Twinity. What are we talking about?

Jochen: The business doesn't exist anymore, to begin with, but we founded it with the idea, or almost all virtual worlds at that time were playing in a fantasy environment. Second life was a fantasy world where you were moving, and with a fantasy avatar, creating fantasy things. What we wanted to build was Metaversum, which was not about escaping the real world, but improving your real life. Not having a second life, but, let's say, have another version of your real life in a virtual world.

Our idea and our thought was, which was fairly revolutionary at that time, to use an avatar which is reflecting your own identity. We're just carrying your name, for example, not a fantasy name. Also, the setting was put into real life, so we were building a one-to-one copy, a geo-coordinate trustful copy of real cities with the idea to entangle the real life with the virtual life.

Menno: Could you say that the technology wasn't ready at that time?

Jochen: It wasn't at all.

Menno: You were too early?

Jochen: We were way too early. Technology wasn't ready, hardware, of course, wasn't ready. We also made, of course, some serious entrepreneurial mistakes, so I wouldn't blame it on this alone.

Menno: What's your biggest mistake?

Jochen: Looking back, our biggest mistake was that having a virtual world allows you to do so many things. You could use it for city planning, for tourism, for creating 3D websites, for creating a real estate market, for having events, for socializing, and so on and so on. The opportunities are endless. We were fascinated, and maybe a bit tech-driven, fascinated by all these possibilities, and we were trying to support too many of them. Looking back, I think we did a fairly good job. Actually, an extraordinary job, but none of these use cases, we really did in a brilliant way.

Menno: Maybe my last question about Twinity. You told me that you still get the emails from people that have been to Twinity, and someone pulled the plug from this world and now they miss it. How can this be prevented?

Jochen: That's a very difficult question. A very good question, because indeed, if people start to spend time in a virtual world, and if they start to create social context, connections in a virtual world, and also if they start using it for business, for example, by developing 3D elements and selling them, a certain part of their private and professional life is moving into another world. If this world is suddenly shut off, it's a bit like a piece of you is dying, like if you would be taking out of the real world. That's a big problem, because so far, all of these virtual worlds are run by private companies. Eventually, that's a problem which needs to be solved and fixed.

There are certain solutions. One component which I later realized, because at that time it didn't exist, which was missing, we had this concept of selling virtual real estate. Since we had a one-to-one copy of a real city and we were really mirroring the houses exactly the way they looked in reality, certain addresses or an address or an apartment, you could only buy once. Needless to say, in a virtual city, of course, you go to the same popular places you go in a real city, so there's scarcity. There didn't exist any scarcity in Second Life. In Twinity, there was scarcity. These places inherit the value from the real places, but how do you trade them and how do you realize this value? Of course, you are dependent on the platform operator and on the business rules the platform operator puts into place.

Menno: Do you think there is a solution? Shall you say, "This must be solved?" How do we solve it?

Jochen: Yes. What you could do there is, crypto provides a solution.

Menno: Crypto.

Jochen: If you convert all these things into NFTs, and there you have a standard where suddenly these elements become tradeable, not only within the world, but outside of the world. Then I think you solve a lot of the problems.

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Menno: The problem surrounding monetizing these virtual worlds was something companies were already debating back in 2006. The advent of cryptocurrencies, and especially NFTs, has now given an interoperability to virtual worlds. It's something that Second Life has actually been utilizing in a different sense for years with the Linden dollar, the currency used by everyone in Second Life. I asked Philip about the issue of monetization in relation to Second Life. When you started Second Life, there were no crypto coins whatsoever.

Philip: No.

Menno: Why is a virtual world better off with a coin like Linden dollar than the Bitcoin?

Philip: That is a great question. The simple answer is this. If you build a space in which people can make things, you need a way for people to trade those things amongst each other, because people can, for example, make a livelihood, if they care to, by selling those things to each other. The whole thing with crypto is creating a kind of money which is intended not to enable trade, but instead to store value. Cryptocurrency, unfortunately, in its current form, is useless as a way of two people buying and selling things from each other.

The Linden dollar was, by comparison, built not to be a store of value. It was not an asset. We built the Linden dollar only to enable people to trade digital goods and services with each other. That was the only purpose and we succeeded, and no nobody else. By the way, you still don't have anything but the Linden dollar as a viable cross-border form of trade between avatars. In fact, the company today provides the services that we built as a thing that you can buy for other virtual worlds. We sell to many other virtual worlds now, the same mechanical stuff that we built for the Linden dollar.

Menno: If you feel like making the crypto community more angry, be my guest and continue talking about this.

[laughter]

Philip: If you're trying to enable trade in a virtual world, you need to basically have a couple of things. You need two things that crypto doesn't have. One is small fees, and the second one is price stability. What we need, in my opinion, is digital currency that can be used as money for trade, and we don't have that yet.

Menno: Second Life is still around. I would like to ask you about the failures that you have made. If I would ask, what would be your biggest mistake or maybe the stupidest thing you've done in creating virtual worlds?

Philip: The list of stupid mistakes would be so long as to be immemorable. One thing that was really hard in retrospect was, we were building a Lego block system where we were changing what the Lego blocks did over time, to try to make the world better. We would do something like realize that if we changed the way a body moved a little bit in the world, your avatar, everybody would like that better. What we didn't think about was that because the world was so profoundly both user-created and economic, that people were making money doing this stuff. I think we were very fortunate in that we accidentally did it better than anybody else so far. Second Life is a very positive place. There are so many learnings about moderation and democratic process and groups, and facilitating the things people want to be able to do.

Menno: Do you really think that's luck? It must be more than luck, if you're saying it's a positive place and you see other places maybe not that positive.

Philip: It's not entirely luck. I had a very strong passion from the beginning of the internet, say 1994, when I started working online. I started building things online. I had a very strong passion about enabling people to meet other people online and like them. What was interesting to me was the idea that people from faraway cultures could become friends.

Menno: Philip's idea that the metaverse should be about bringing people together, sharing cultures, and meeting new people is a noble vision. It's the design principle like this that will decide the character of the virtual space. It's one which the owners of the biggest social media companies today could learn a thing or two from. How have these initial visions played out, and what about the future? Are Jochen and Philip confident that the metaverse of tomorrow will be able to hold on to these principles?

I went back to Jochen to find out, seeing whether the predictions he had for the metaverse back in 2006 have come true today. Do you still remember what kind of predictions they did back then in the metaverse roadmap, predicting what will happen in 10 years later or 20 years later?

Jochen: Yes. The predictions were, let's say, pretty aggressive and it didn't happen like that. The prediction were, of course, that as before, people started to spend more and more time on the internet, going from web browsing to interaction and Web 2.0, and maintaining their social networks in applications like Facebook. They've predicted that within 5, 10 years, that very soon, people will do the same in the 3D space. That didn't happen.

Menno: One of the predictions was that we will spend time in 3D offices in 2016. It didn't happen then.

Jochen: No.

Menno: Will it happen now? What's your take on that?

Jochen: I think it will, but I would be careful to say in 5 years, or in 10 years, or whatever. I think it will happen, not that Meta opens the virtual world, and everybody walks into the virtual world and moves their business there. I think it will more happen like the world wide web happened, that suddenly, there are millions and millions of web pages and people are moving more and more of their activities there, and over the time, it becomes more centralized. The reason for that is there's one big problem with virtual worlds, which we were also facing. If you look at the roadmap, the activity people spend most time on was actually socializing. That's still true today. We spend a lot of time on WhatsApp and Messenger and Discord and whatever, but we do this with a very short attention span. We jump in, we jump out. The tasks, which particularly young people, millennials, or younger, they're switching constantly from one task to the other. Virtual worlds is about immersion and it takes a bit. Once you are immersed, you are immersed. When you jump out, then you need to, a bit, shake your head, and see, "Ah, here I am." Then you need, again, a couple minutes to get in.

Menno: Where do you think it'll balance out? Maybe not world peace, but will the metaverse create, in general, a better world?

Jochen: I think it will create a better world because it will create, as the internet already does, a certain level field which will help many people who currently are disadvantaged. It will enable you, if you have certain handicaps in terms of money, physically, or so, you can easily overcome them. It will allow you to do many things you simply cannot do today for certain reasons. With anything as powerful as the metaverse, of course, you always have to be careful that it also doesn't support the opposite things. Utopian, dystopian, let's say, it's very close together.

Menno: This is always how our conversations about the metaverse seem to end up. The utopian versus the dystopian. Which way will it swing? I ask Philip the same thing. Does he lean towards the more exciting visions of a positive future for the metaverse, or the more sinister ones? How does your own metaverse roadmap look like maybe 10 years?

Philip: The thing that's going to have to happen first is we're going to have to make avatars good enough for most people to be comfortable using them. That's the measure of success. Now, as I said, the thing that is still true today, that was also true in 2006, is that most people aren't comfortable communicating with other people as avatars. Being comfortable going to a business meeting where your boss is there as an avatar, is what I'm talking about. Most people would not be comfortable with doing that, and they're not comfortable today. We don't have avatars that are good enough yet to get the thing we're all fantasizing about to happen, which is everybody has a meeting a week in the metaverse.

Menno: If you would have a crystal ball, and I'll ask you, what could be some of the surprises of the metaverse future? Something that's maybe not on many people's radar.

Philip: I touched on a positive one at the beginning, which was the Proteus effect, but let's talk about some risks. One of the things that could go wrong is advertising. I've said this a lot, and I'll say it here, and I say it every chance I get. We have to, as a species, decide that personalized advertising is illegal. Any situation where the advertiser has information about the individual who is looking at the ad, that situation has been a disaster for the last decade. If we continue to allow companies to build a business on advertising with surveillance data and personalization in the metaverse, we are likely to see extraordinarily bad things happen.

In the metaverse, you don't know where the ads are because the ad is a person across the street. She's drinking coffee, that she's basically a robot trying to sell you. You don't know that she's not a real person, and so that's the first bad thing.

The second bad thing is, all this equipment we're talking about that makes avatars better, can be used to get information about us, which is not safe. For example, your body movements can tell the machines whether you are depressed right now. They can know that within seconds. If we allow the metaverse to be based on advertising, we are likely to see grave harm come to the people who use it.

Menno: I'm with you on the dystopian futures. I'm only thinking, maybe we can end our conversation with a positive note maybe. Looking at the future, what would be a positive, let's call it a killer app, whatever you want to call it?

Philip: Sure. Let's think about school. If we could put any group of students with any teacher, and they could have the same experience that they have in a classroom today, that is something that could be very positive for the world. Any group of kids from anywhere could meet with say an Egyptologist. This is something we did in High Fidelity experimentally, and it was really cool. We were taking groups of kids from San Francisco that came to our office and put on headsets. We were taking them into an Egyptian tomb with an Egyptologist guiding them through it. That Egyptologist was one of the best in the world at that tomb and at her work. It was an amazing experience.

The ability to educate by connecting people in virtual worlds is a really big positive opportunity. We've already seen some success with it in Second Life. There are certain teaching environments that work really well in Second Life, and I think that's an opportunity. Of course, there's a risk. It could be something that only rich people do because they buy quests and we have to address that risk as well, but it's a possible very positive thing.

Menno: Thank you, Philip. I would like to end, but let's meet in Second Life. You'll be seeing me more in your world pretty soon.

Philip: That's great. Thank you. I'll see you there.

Menno: It's always difficult to find the line between utopia and dystopia. Sure, there are visions of a future where our avatars are being watched, judged, and manipulated by fast corporations for their own game. Are we right to be this cynical? Could there be another way? I was happy to hear that neither of our guests were too hung up on this, because back in 2006, the internet was a happy place. A place of hope, of optimism, and the same is true for ideas of the metaverse back then. It was about connection, a new form of communication. We've learned so much about the internet and online communities since 2006. Not least, that they work best when government step in to give some guidance. If entrepreneurs like Philip and Jochen can keep learning and hold on to some of those vital principles that were established, the future of the metaverse will certainly, let's say also, hopefully, be in safe hands.

That's all for today. Thank you so much for listening, and as always, thanks to our guest, Jochen and Philip for taking us back to 2006 to learn more about the history of the metaverse. If you enjoyed this episode and want to let us know, please do get in touch on LinkedIn, Twitter, or Instagram. You can find us at Sogeti. Don't forget to subscribe and review Playing With Reality on your favorite podcast app, as it really helps others to find our show.

Next week, we'll be looking at one of the most exciting use cases for virtual technologies, digital twins. Do join us again next time on Playing With Reality.

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