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Linden Lab – Profile

October 29, 2004

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HQ: San Francisco
Founded: 1999
Management: Founder/CEO is Philip Rosedale. We met Philip in 1995 when he was running 1-man firm developing software for used-car salesmen. He then created a video codec that caught the attention of Rob Glaser at Real Networks, which at the time was audio only. Philip’s business model was to put a camera on a couple of strippers in the basement of our shabby office complex and pump the live video over the net. Philip moved to Seattle and went on to become Real’s CTO. Philip has social skills despite his geek interior, but make no mistake, Linden Labs is driven less by financial reward – there are easier ways for Philip to cash in – than by his own geek fantasy to pioneer virtual worlds.
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Investors: Company raised $8M in October 2004 from Benchmark Capital, individuals and the Omidyar Network. Linden was seed funded by Mitch Kapor and Drugstore.com founder Jed Smith.
Business Model: Linden Lab operates Second Life, an online multi-player world similar to The Sims, except that in Second Life players have tools to create characters and their accoutrements. Players pay $9.95 to launch Second Life.
Competitors: DigitalSpace, OZGate
Dirt: We believe it has been a tough 5 years for Linden. It’s not enough to get a product to market – the company also needed early adopters to build the world to make it interesting to others. A number of well-funded companies have tried multiplayer virtual worlds – recall Worlds Inc. and Oz.com – but failed when they could not move beyond a core of geek players. Sims works because it is easy to get up and going. It’s unclear at this point if Second Life can attract a broader audience. The historical precedent is not favorable.

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