Interview with Michael Wilson, CEO of There.com

There.com, went live in 2003 as the first virtual world. The company was actually founded in 1997, but launched to the public in 2003. Unlike other virtual worlds our focus has always been communication and community. We spent a lot of time making sure the avatars could load correctly, that they were able to express themselves, and that the service was engaging and inviting. We wanted to ensure that the service could run on as many computers as possible, and in fact you could run the service on a dial-up in 2003.

It was such a new concept in 1997, that it took a lot of time to build our the technology. We built a distributed platform that was able to handle the physics around many, many people interacting simultaneously. For example when you hit a ball, everybody sees the same thing. In addition graphics technology took a long time to get that right so that it would work with a small footprint and on machines with low bandwidth.

Interestingly, the average user spends over four hours a day on the site, and some spend much more time.

The purpose of the platform is to provide people a new way to communicate and express yourselves. Similar to the adoption of cellphones, instant message and others I believe that There.com is going to become a new way for people to get together.

There are a number of ways to express yourself within our community, one is through the use of an Avatar, which can be customized, to how you dress, but also how you interact in the community and present yourself to others.

We have integrated a commerce system that enables people to create, sell and buy goods within the virtual world.

I think now we are starting to see that a lot of people beginning to participate as part of their daily lives.

I believe is that people engage is segments of time and they are multi-tasking with other forms of media. Going forward, one of the new technologies we have introduced is live streaming video.

Exactly. I think that is going to become more and more important. People want to connect regardless of where they are or the media.

We have four sources of revenue. First we have the membership fees, which are not a big part of our plan. Second, we sell virtual currency, which is by far our biggest revenue generator. Third, we make money via advertising. Lastly, we have e-commerce, which will become our most lucrative business.

Users have the ability to create a virtual shopping experience. If you can buy something that looks approximately like (I’m not going to claim that it looks exactly like) something like the clothing in a virtual world, trying them on in different combinations, and eventually decide if you want to buy it, that’s a pretty powerful experience.

In fact, you could even take things a step further, and say the manufacturer could never produce the real goods until they see that the virtual goods are selling. So they could avoid running off 10,000 pieces of something that no one wants to wear.

We have people who specialize in producing custom buggies, people who specialize in producing custom clothes, anything you can produce virtually, you have people who never thought they’d be using these kind of tools having fun doing it and expressing themselves in yet another way.

Well, I actually think you don’t need to be very big at all. Here’s why.

First of all, I’m going to run contrary to what everyone else is saying. The commerce that exists in the world is very exciting. You’ve got to remember it’s a virtual economy. You cannot create a binding contract, meaning it’s basically a way of doing trade within the virtual world. It’s really unfortunate.

The really exciting things are when you start bringing real-life activities into the virtual world, and see real-world brands using these things to actually conduct business such as advertising. We’re finally going to see innovative advertising that’s not in-your-face like banner ads or billboards.

You know, given those areas, that’s what I think makes these communities vibrant and exciting. I think that, and I’m going to get to the size, I think you could do that with an actually active size of less than 50,000 members.

Because, in our back end, we produce so much data on member’s likes and dislikes, that people that work with us have the ability, although they haven’t done it yet, to specifically target particular members, to give them the products and the advertising that they want. It’s basically like Amazon.com’s recommendation feature on steroids.

With the old advertising model, you need to bring in 10,000,000 people or you need to buy a Super Bowl ad on the chance that some fraction of a percentage of members were actually going to be able to do stuff. But now that you know that these 200 or 2,000 virtual people wear sunglasses, maybe we’ll show them some real advertising about real sunglasses, and give them the opportunity, subtly, to buy the real thing.

I see three kinds of behaviors, and I’m sure there are many more that I haven’t observed, or that I don’t want to observe.

The first one is the person who attempts to make the avatar like themselves, or somewhat like themselves. “This is my real identity and this is who I am.” And they share that real identity with a limited number of people whom they trust. If you look at some of the oldest virtual communities like ‘The Well’, also based in California, and I actually worked there for a while, the whole concept of one ID, one identity, it’s written right into the by-laws of the service.

The second thing you see is people who create an avatar of how they would prefer to be, which is different from their real-life persona in a few areas. The person is very svelte, or they’re very tan, or they have a different skin color or a different body shape. You see people doing that all the time. And again, that may be because it makes that person feel safe. There’s no chance that you’re going to tie this person to the real person.

The third type, which you often see with young people is creation of avatars which may be wildly different. They’re using those avatars to try out new behaviors, new personalities. So if you and I were in school, and we woke up one day and decided we were going to try to change our clique, if you will, you’re going to stop being a jock and you’re going to become…we called them ‘breezers’ in my day, if that didn’t go well, the repercussions were kind of prominent and important. But in a virtual world, you can wake up one day and say, “I’m going to become a greaser and drive a virtual motorcycle and act completely differently, and if it doesn’t work out you just throw the character away. That character doesn’t exist anymore.

And I admit, since kind of old, when I think about it I can’t decide if that’s appropriate behavior.

Whether that’s right or not is kind of troubling, but it’s all right. It’s something for people to try. And you see that aspect in multi-player games. People decide, “Well, I’m going to be this kind of character for awhile, and then they get bored with it and they never log onto it again or they throw it away.

Since there’s no cost involved with it, There is free, it’s a very easy way to try that kind of stuff.

Well, we have an abuse department, which is around all the time. So if you report abuse, we will investigate is as quickly as we can. Additionally, we have people who hang out in the world who monitor for abuse, if you will,undercover agents. When they identify suspicious behavior we take abuses of the service very seriously. We don’t make it public when we do, because that’s obviously an invasion of everybody’s privacy, but we take it very seriously, we act very quickly.

Also, we try very hard to educate people not to give out personal information.

You know, I don’t know. I would say not. I think there are many aspects of virtual world that have not been explored yet. But I’m going to guess, unless there was a genuine way to tie those two avatars to real people, which there is not, that it would be extremely difficult if not impossible. I mean, there is no way to absolutely know who is speaking to you or who they were speaking to. I think you’re going to have a hard time proving that that was a direct attack on you. Now, I’m not a lawyer, I’m just speaking from a pragmatic standpoint.

Now on the other hand if you put up a giant sign in your giant public area saying, “Michael Wilson, identified as the CEO Makena Technologies, tortures small animals,” that could probably be actual because it’s distinctly identifying a person. But like many things this something that hasn’t been explored at all.

I actually believe we may have been a little bit premature running up and down the streets waving flags claiming that people are virtual millionaires. They’ve attracted the attention of the people that are interested in people making a lot of money, that would be the IRS and the government, without being completely prepared to discuss the situation. The IRS is now saying, “Whoa, this is really exciting, somebody’s made a million virtual dollars.” You know ostensibly. “Can you please tell us in detail all about that?”

And unfortunately, I don’t think people are prepared do to that. I think you should be very clear about your legal standing before you go waving a red flag saying IRS come and talk to me.

I can simply say that my drive to be an entrepreneur developed over time. At the core of it, I have always wanted to make computers useful to people. When I went to Oracle, it was pretty clear to me that getting all the data that we had floating around into an organized manner made computers useful to people. Then when I went to work for a company called Neuron Data which was pioneering artificial intelligence products which we’ve used in a variety of applications and I thought, well there’s a way to make computers useful to people.

In terms of, as an entrepreneur, what’s been important is the customer is the most important person. We always said at eBay, that the most successful features were the ones that the customers asked for.

I guess the biggest one is as you grow up, as you climb the ladder of an organization, all that means is that you work for more people. So my job as CEO is I work for everyone else. I think you need to keep that perspective because you need to enable the organization to do things. Of course that doesn’t mean I bring everybody coffee or anything. But the way to build a successful organization is to basically empower your employees to do things and empower them to go forward. One way to do this is say what is my job today? My job is to help my employees get their work done.

I think you’re going to see There.com as being a ubiquitous form of communication that people to create new groups, communities and relationships. It’s going to be another tool that consumers use just like you use cell phones today or you use IM or email or a commerce site like eBay or Amazon. It will just be another tool in your personal toolkit within your life.