Linden Lab: Crossing the Chasm

In early 2008, managers at Linden Lab, creator of the virtual world Second Life, faced decisions about the company's growth strategy. Despite profound initial skepticism about demand for a user-generated virtual world that was not a traditional game, Second Life had achieved profitability and strong growth. However, sustaining growth would prove challenging. Growth had strained Linden Lab's technical infrastructure. Also, although Second Life had attracted a large, loyal base of early adopters, it was unclear whether their preferences were similar to those of mainstream consumers. In this context, management faced choices about platform strategy and target markets. Should Linden Lab continue to offer an open platform or build its own solutions for customers? Should it target adult consumers, teens, enterprise customers, or the education market?