Online Community Business Models

Has Web 2.0 brought about new opportunities for Internet entrepreneurs? The increase in network bandwidth has brought about an array of online community types, each having income streams to stay afloat. Examples two community models are compared –   

3D Virtual Worlds – Second Life (www.secondlife.com) is a 3D virtual world which has its own economy, using its own currency the Linden Dollar which is bought and sold on its LindeX exchange. Members make money as they would in a real life environment with virtual products and services. Second Life has become such a success one member is reported as becoming the first Second Life millionaire (see http://www.businessweek.com/the_thread/techbeat/archives/2006/11/second_lifes_fi.html) by starting out in virtual real estate, to setting up a ‘real-life’ company creating 3D environments.    

Wikis – Goldcorp (www.goldcorp.com) is a traditional gold mining company which took a gamble by utilizing wiki technology to aid its mining strategy. It took an unusual step of posting its entire data one of its mines (Red Lake), and offered awards totalling $575,000 for anyone able to identify where 6million ounces of gold might be located. (See – http://www.fastcompany.com/magazine/59/mcewen.html). The “open-source” gamble paid off when they literally struck gold from the idea; from producing 53,000 ounces in 1996, it was producing 504,000 ounces in 2001.   

Whilst both community types give a stage to entrepreneurial initiative (from anyone) they differ in their makeup, Second Life gives individual members an opportunity to setup on a small budget and create their own virtual business with minimum risk. The wiki approach lets a business attract and access untapped talent from across the globe, and where the model is applicable it has proven potential for success. Although such an approach is not without risk, posting before classified data online is available for all competitors to see.    

The mining wiki community was made up of members with an expertise in mining looking for a final solution to a problem, the Second Life community is a diverse ongoing and evolving community who’s members have differing aims. Both communities have the ability to turn the individual into the many to for real world action.     

Both community models are not confined to economics. Second life offers staggering potential of uses for its members, examples are staging real-life lectures, business conferencing and group meetings to name a few. Wikipedia (www.wikipedia.org) is an example of using a wiki for educational purposes.