Second Guard: Who are the Puppet Masters?

The metaverse has been a buzz over the employee shake-up at Linden Lab. First with a June 9th announcement of a 30% staffing cut (RIF), followed by a June 24th announcement that CEO, Mark Kingdon would be stepping down, founder and past CEO, Philip Rosedale will stand in as interim CEO, and CFO Bob Komin will be assuming the additional role of COO. A sigh of relief can almost be heard throughout second life, on forums and in blog posts, as second life residents and alumni alike anticipate the results from this shake-up. Hoping that Philip will revive his original vision of Second Life… a vibrant, "your world, your imagination" virtual landscape where some have made names for themselves, established virtual companies, and, in some sense, re-enacted, at a micro-scale, the heady days of the dot-bombs.

It is of course, easy, to blame Kingdon for resident unrest and the recent RIF. After all, Kingdon, who was appointed CEO by the lab’s board of directors on April 22, 2008, has been summarily removed just a little over two years later. Notwithstanding the fact that he certainly made his share of mistakes, missteps, and bad choices, startup CEO’s still tend to be little more than puppets . The question of course remains, "Who are the puppet masters?"

The metaphorical changing of the guards is all too common in the Bay area. During the dot-bomb days, executives changed companies so often, that they seemed to be engaged in a game of musical chairs. It was quite interesting watching and trying to predict who was going where next. Whether it was Sun MicrosystemsW, Oracle_CorporationW, GoogleW, YahooW, NetscapeW, or AOLW playing swap the executive, or other less-known companies changing out their executives for more well-known names from the Valley’s who’s who roster. Back then, media outlets such as cnetW, WiredW, and Fast CompanyW would break the latest and greatest news, provoking their readers into a feeding frenzy of speculation: Acquisition? IPO? Shuttering? Today, TechCrunch seems to be leading that particular dance. Still, they are no more pulling the strings than are the company’s figureheads. Their job, after all, is to create the buzz… or, in some instances, keep it going. If they are not the ones pulling the strings, then who is?

Enter the venture capitalists. In the case of Linden Lab, enter Mitch Kapor. On April 28, 2003, Mitch Kapor, co-founder of Electronic Frontier FoundationW, was named chairman of Linden Lab’s board of directors. Kapor, along with three participants invested Series-A funding of $8M in October of 2004. Likewise, along with six participants he invested Series-B funding of $11M in March of 2006. These funding milestones are considered significant where startups are concerned. Series-A funding could be seen as a vote of confidence. The company seems to be doing something right. Series-B funding takes that vote up a notch… and, in some instances is designed to prepare the company for growth, an exit strategy, or both. The ultimate goal is return on investment. And the expected, or rather, hoped for, return is not pennies on a dollar, either. If they wanted that, they could put their money in bonds, or in a high yield CD. Even so, this approach still presents a gamble. A company could look good on paper yet, totally flop. For this reason, part of the funding equation involves control. In other words, whether angel, seed, or series, the venture capitalist is basically buying shares of company control. They are mitigating their investment risks. Venture capital is metaphorically speaking, the golden chain or guilded cage (take your pick) of startups.

In this instance, Kapor appears to be the primary holder of the Lab’s golden chain. Especially in light of his tweet that showed up barely on the heels of the press release confirming the Lab’s reorganization, wherein he wrote:

Hence, when considering the Lab’s 30% RIF and Kingdon’s layoff, along with Rosedale’s and Komin’s assignments, and how these together, may effect the lab’s future trajectory, it may behoove us to revisit Kapor’s vision of virtualities and the future of technology. Kapor’s SL5B keynote may lend a clue in this regard.


  1. CommentsVirtuality Hacks   |  Friday, 25 June 2010 at 02:31

    Second Guard: Who are the Puppet Masters? →

  2. CommentsVirtuality Hacks   |  Friday, 25 June 2010 at 02:39

    Second Guard: Who are the Puppet Masters? → ← @MLindenSL @philiplinden @mkapor #secondlife #sl

  3. CommentsDianna Voight @ SL   |  Friday, 25 June 2010 at 02:45

    RT @VRHacks: Second Guard: Who are the Puppet Masters? → ← @MLindenSL @philiplinden @mkapor #secondlife #sl

  4. CommentsSami Tabla   |  Friday, 25 June 2010 at 03:04

    RT @VRHacks: Second Guard: Who are the Puppet Masters? → ← @MLindenSL @philiplinden @mkapor #secondlife #sl

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