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Business consulting comes to 'Second Life'

Accounting firm's COO wants to help the people who are breaking new ground with their "Second Life" enterprises.

SAN FRANCISCO--If one thing has become clear about the virtual world "Second Life," it's that it is providing lucrative business opportunities to a large, and growing, number of entrepreneurs.

And while these innovators--creators of burgeoning digital clothing, construction and land empires--begin to flourish, many are finding that the practicalities of running a business, even in a virtual world, are complex and demanding.

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Video: 'Second Life' moves to real life
Community gathers for its second annual convention.

But now a woman with a long established and successful accounting and business consulting firm is bringing her team's skills and expertise to "Second Life." And she's hoping she can make a splash as the first to provide this era of digital industrialists with the kind of financial advice that can help them become successes themselves.

Arlene Ciroula, the chief operating officer of the 100-person Baltimore accounting firm KAWG&F, said she wants to help the people who are breaking new ground with their "Second Life" enterprises, many of whom have never run businesses before. And that's why she spent the weekend here at the Second Life Community Convention, a gathering of several hundred "residents" of the virtual world, talking to as many people as she could and trying to drum up interest in her new initiative.

Ciroula said for the time being, at least, she would take Lindendollars, the in-world currency of "Second Life," as payment for services rendered.

"The idea is that as I began to learn more about 'Second Life' and saw how the business community had established itself, it will undoubtedly just continue to grow, and the community is unserved," Ciroula said. "No one is serving this community with accounting, business consulting, strategic planning or budget forecasting services."

While it may seem odd that players of a virtual world would need business advice, "Second Life" is clearly one where it may well be valuable. The open-ended digital environment, in which anyone can create nearly anything they can imagine, look like nearly anything they want and build just about any kind of business, has proven since its 2003 launch to be fertile ground for many innovative thinkers.

Thus, there is a small but growing number of people who have found it possible to make their entire livings with their "Second Life" businesses, be they employees of companies like Electric Sheep, which builds complex in-world projects for clients like Major League Baseball, Lego, Dartmouth College and many others, or Anshe Chung, a developer who famously makes six figures developing and selling "Second Life" land.

"From my research, there are around 3,100 businesses in 'Second Life' right now," said Ciroula, who goes by the in-world name "Chili Carson." "There are currently 300,000 to 400,000 users. So do the math. I would expect it to grow along with the population."

Managing moeny and cash flow
Ciroula said she believes there are many similarities between advising a business in real life and in "Second Life."

Those include the need for marketing and brand-building, and the necessity for establishing a good reputation. Further, businesses of all kinds need to learn how to manage money and cash flow.

"There's the classic, 'I'm small, how do I get over certain humps, so I can get bigger?'" Ciroula said. "'How do I know when it's time to hire someone?'"

At the same time, though, "Second Life" businesses present a set of unique challenges.

"You're dealing with a country that's forming and an economy that's forming," she said, adding that she had recently heard one in-world businesswoman talking about the difficulties of keeping her outfit running. "She never dreamed of going to work in a 'country' where every Wednesday (when 'Second Life' publisher Linden Lab shuts the virtual world down for maintenance) a hurricane was going to come and wipe her out. So it's a shifting environment that's still getting its feet."

To some in the "Second Life" community, Ciroula's idea is a good one.

"'Second Life' is full of small businesses with people who are new to small business," said Giff Constable, vice president of business development for Electric Sheep, who added he wanted to see more details of Ciroula's plan. "And there's no infrastructure in place to help them."

Constable also said giving in-world businesspeople a way to work through some of their practical business issues will have a ripple effect across the entire "Second Life" financial system.

"To see an accounting firm come in, it's going to help the community and the economy tremendously," he said. "It's solving bottlenecks we have in the economy."

For his part, Linden Lab CEO Philip Rosedale also lauded Ciroula's idea and said she was likely onto something big.

"I think it's great," Rosedale said. "It's such a rich field (for) an accountant. There're no competitors."

Rosedale did add that anyone trying to set up a business like Ciroula's would have to deal with the inevitable problems that arise in an unfamiliar business environment.

He said, for example, that Ciroula's firm would likely have to spend a significant amount of time working on dispute resolution and arbitration as its clients work through problems for which there are no known solutions.

And that's because "Second Life" has few, if any, rules governing business. And Linden Lab has pretty much no oversight over what goes on between parties in a transaction.

Meanwhile, as a result of this lack of rules and lack of understanding among "Second Life" businesspeople over what is acceptable behavior, Ciroula is also planning on creating a "Second Life" chamber of commerce.

The idea, she explained, is to provide a "dialogue" for businesses, as well as a member directory. Then, she added, customers could know they were doing business with certified companies, and businesses could learn some best practices to follow as they try to grow.

For Constable, that seems like a good start, and one he wants to keep an eye on.

"It is great in concept," Constable said. "So I'm really excited to see what they pull off, and (we'll) potentially be a part of it."