Paul Cromer had left two weeks ago, but Steve was still aware of his ghost in the building. This was for three reasons. The first was how quiet the early mornings were in the office now that Paul’s guitars were gone. It was early Monday morning, and you could almost hear a pin drop. The second was the fact that two more engineers had left the previous week. The third and most pressing issue was on the screen in front of him. He had the weekly stats for downloads and visitors to the virtual spaces. They had been up for one month, and some disconcerting dynamics were appearing. The level of downloads from the various partner web sites was remaining constant. Then there were the virtual worlds. First was the “home world.” This was the virtual space that all the clients defaulted to when they first used their client. They had created two other worlds for people to wander into also. The first was a no brainer as far as they were concerned. SportsWorld. What else could get people to passionately talk for hours on end? The second was a gift to the engineers. CyberWorld. A punk virtual world of the future. Very Snowcrash indeed. Then there were the two virtual worlds for the two movies.
Five worlds. One full month of traffic and the results were in. The two worlds for the movies were a disaster. Minimum traffic and almost no repeat visitors. The only thing keeping them alive was the employees that were rotating through the space as guides for the new people. Part of the reason was one of the movies was in the process of crashing and burning at the theaters. But the other movie was shaping up to be a hit, and still the virtual space was deserted. The only reason they could come up with was that movies were not enough of a community builder to keep bringing people back to the site. They were too transient to succeed as persistent content. Still, the studio was not going to be pleased.
The home world was holding on. To cap the number of people in each virtual space, they were doing the copies of each space after it rose to twenty users. The good news was they seemed to have at least two full spaces going at any given moment. The bad news was people were having trouble finding each other. This was another case of consumer behavior they hadn’t anticipated. People would decide to meet in the home space at a certain time. But between the time the first person arrived, and the second appeared, the space would fill up. Their software would then copy the space and send all the users into the new space from that point forward. So both people would be in the home space. But they were in different copies of the home space. This was proving to be exceedingly confusing. Still, at least they were showing up.
SportsWorld was filled purely on the basis of action. If a popular game was on, it would pack them in. If not, it was empty. As far as building a community goes, this again was not very good. They would watch on the servers as one person would log into SportsWorld, realize that no one was there, and then log right off. Which was the same thing the next person would do. And the person after that. People were popping into SportsWorld all the time. They just weren’t staying there. No advertiser was going to sign up for this.
And the stats over the course of the month were trending down. After the initial surge of interest, the activity was slowly petering out. It was very gradual, but the evidence was unavoidable. They weren’t proving to be as sticky as they thought they were going to be. The most confusing part was an ever widening gap between the number of downloads and the number of people on-line. The download pace was not decreasing, which meant they should be replacing people fast enough to keep the activity steady. But it was heading down. They had no idea why that was happening.
The only good piece of news was the on-line time. The average visitor was spending twenty-seven minutes on-line. Almost half an hour. This was fantastic. But then they wouldn’t come back. This wasn’t fantastic. Paul’s words were coming back to haunt him. It took a while to build a community. And Steve wasn’t sure how much time they had on their hands.
Just to make sure they were sufficiently panicked, AOL had mysteriously cancelled their meeting.
This was topic number one for their staff meeting this morning. Steve quickly checked his watch and then reluctantly got up and headed down to the conference room. The rest of the executive staff were there, and Steve found a seat next to Brent. He saw to his surprise that Vincent was sitting next to Peter. This should be interesting.
Peter had a strange grin on his face. Part happy, part undecipherable. Peter waited for everyone to get settled before he started. “I’ve asked Vincent to join us to sit in on our meeting to get up to date on where we are with everything, and then to have him bring us up to date on some activities on his side. Brent, can you start us with the engineering?”
Brent had a habit of shuffling papers around in front of him before he would start. After the expected rustling of paper, he started speaking so quietly they could barely hear him. Brent was terrified of Vincent. “First, I thought I would start with the status of our action out in the real world. All our servers, both on the download and the hosting side have been working great. The iteration technology, which I know everyone was concerned about, has been rock solid, and we spawn and unspawn additional copies of the worlds without any effect on the servers. We have added one patch to the download when we found out that the new version of DirectX was causing a fault in one of our software components. Besides that, the technology has been rock solid.”
Peter broke in. “On the spawning front. We are finding out that people are having trouble finding each other when they meet in our worlds because they sometimes wind up being in different copies of the same world. What we doing to work around this?”
“We are going to have a page on our company web site that will list all of our worlds at any given moment, and who is in them. That way you can quickly find friends no matter what worlds they are in. However, if that person is in a world that has hit the twenty-person limit, they still aren’t going to be able to join them. But at least they will know where their friends are.”
“Is there a way that they would messenger their friend in the filled space so they could join them in another?”
Brent thought about this. “I don’t see how we could quickly do that without changing some code around. It would involve some fairly serious hacking on the client.”
“Great, let’s see what that would take. Can you let me know by the end of the week?”
Brent shrugged his shoulders. Peter plowed ahead without even noticing. “How we are on the headcount issues?”
Shuffle, shuffle. “Well, as everyone knows we lost two more engineers, one in QA and one in the server team. I suspect that the rest are probably looking. They were all pretty loyal to Paul and Dan. We need to do something to get them all motivated again or they are going to bolt.”
Peter glared at him. “You don’t think they are loyal to our VP?”
Steve thought that was a pretty blatant attack on Brent. It was probably done for Vincent’s benefit. At this point Steve knew all the early signs of someone being teed up to fail. He also didn’t even really care any more. He had become as Machiavellian as the rest of them. As long as the target wasn’t him he couldn’t be bothered.
Brent reeled slightly from the attack and soldiered on. “I don’t think that is the issue. Whenever managers bolt, it has an effect on the people who work for them. We could try to promote one of them to take over the team. Could put some empowerment back on their plate.”
“Good idea. Figure out who that is by the end of the week also. Are we interviewing to replace the people we lost?”
“Yes, we have ten candidates coming in this week and next. We should have the new people in fairly quickly here.”
“Great.” Peter made a show of checking things off a list in front of him. “Barbara, what is the latest on the marketing?”
The latest addition to the executive ranks was yet another Apple refugee, this time from the marketing side. She had arrived and instantly pilfered five more people out of Apple. Presto. Just add water and instant marketing department. She rolled right into her song and dance. “First the good news. We have hired Dan Larabie out of Apple, who was in charge of partner marketing for us. He is going to be in charge of setting up our virtual advertising program for us. We probably need 90 days of traffic in our spaces before we can set rates, but I think we are already showing that our virtual billboards in our spaces are going to get the same traction as those in the real world. And the fact that our average visitor is spending almost half an hour on-line is going to blows their socks off. We are already talking to a couple of media agencies to sound out what they think this will look like.
“On the corporate marketing front, we are creating a corporate video tape that will be our primary sales and marketing piece to the outside world. We had discussed going with print collateral, but if a picture is worth a thousand words, a video is worth a million when it comes to our product. When people see our avatars actually interacting with each other in our virtual worlds, the full power of the software comes to light. We are looking to have this ready to go by the end of the month.”
Peter was scribbling furiously on the piece of paper in front of him. “Have we talked to our partners about using their spaces? The more branded spaces the better. Having the movies in there would be great.”
“That’s a good point. We will find out what we have to do to get a release from them. On that note, I now have to move to the bad news. I spoke with the head of marketing down in LA yesterday. He informed me that they were going to shut down their marketing efforts on our behalf. This means that although the download pages will remain on their sites, they aren’t going to do anything to drive traffic to them starting next week. His explanation was that this was never more than launch marketing, and they never meant to support this through the entire movie run. In reality, I think they are disappointed with the results of their spaces and have decided to cut their loses.”
The room was quiet. Unless they managed this relationship correctly, they would have a real problem on their hands. All it would take is one studio loudmouth at Spago to announce to the entire Hollywood solar system that their technology was not fulfilling its destiny. Peter sighed. “All right, I will talk with them today. See what I can do to keep this relationship moving. We need to have them give us another piece of content or the well runs dry. And it can’t run dry before we have a chance to lasso in AOL.”
“That may not be a problem,” said Vincent quietly. The whole table turned and stared at him intently. “I had a very interesting conversation with my contacts at AOL yesterday, and things have taken an unexpected turn. It seems they are not interested in leading the round after all.” The entire table gasped. Then Vincent broke into a grin. “They want to replace the round. AOL wants to buy you.”
There was complete silence. Steve didn’t even know how they should react to this. Vincent plowed ahead. “Now, I have had some long talks with them, and I think their interest is genuine and fairly active. However, they do have a concern, and that is this. The word is out that they are interested in you, and are interested in investing in the company. This is making more people get interested, which is threatening to increase the value of this company. Now, obviously this is not a problem for us.” There were snickers around the table. “But this is a big problem for them if they are considering buying the whole company. In essence, they are driving the price up on themselves. And they would like this dynamic to stop, at least long enough for them to close the purchase or walk away. In short, they want you to close down this round.”
Peter stared at him. “Just stop like that? Don’t try and raise money? That puts us in a pretty precarious position. We could run out of money before the deal closes, and then what do we do?”
“I already thought of that. What I recommended to them was that they agree to fund the company during the time that they are closing the deal. In other words, they pay the bills. That way no money is going out of our bank account and we don’t have to rush to any decisions.”
Steve thought about this. It almost sounded too good to be true. There had to be a catch. Of course, there was.
Vincent continued. “Now, they agreed to this, assuming that we cap the amount they pay per month. Obviously they don’t want us to rush out and hire a hundred people on their dime.”
Steve saw immediately where this was going. “How much is the cap?”
“300 thousand per month.”
Steve shook his head. “We are burning almost 500 per month right now, and that is just fixed costs. That doesn’t include lines, servers, marketing, sales, content creation. Any of it.”
Vincent held up a finger. “I thought of that. Now the marketing and sales we can scale back during this period. As for the rest, it occurred to me that there is a quick way to solve that problem and at the same time make us more palatable to AOL. Get rid of the content group. Then we only have to cough up about another 100 to make expenses.”
Steve couldn’t believe what he was hearing. “If we get rid of the artists, who is supposed to create all these wonderful worlds for us?” He looked around the room for support, but realized there was none. Everyone had AOL shares dancing through their heads. “What kind of signal are we going to send to our content partners if we blow up the content group?”
Vincent smiled. “I think the message we send to them is that they know how to create content better than we do. And somehow I don’t think they will disagree. And AOL has their own content group and an authoring set they are ready to create on our behalf. It is a win win situation for everyone.”
Peter chimed in. “I agree with Vincent. Anything we can do to make ourselves more appealing to AOL and our partners at the same time seems like something we should consider. As Vincent said, it seems to be a win win situation.”
Sure, though Steve. For everyone but the people we are about to fire.