I spent my day at the Virtual Goods Summit at Stanford University today, and it exceeded my original expectations! The conference was setup in less than 6 weeks, panelists were top notch, and there was a decent sized crowd.



Credit to Jeremy Pepper

What are virtual goods? They’re just intangible items that people buy through virtual worlds / websites that have some greater meaning to them. The big question that came up was, what are real gifts and how different are they from virtual goods? For example, let’s say that you’re in the hospital and someone sends you some flowers, it makes you feel good. What are you getting out of the flowers? A positive feeling more than the actual object, “flower.” If the item has utility to the user, they may be willing to pay. For example, Kevin Efrusy of Accel Partners commented on the Facebook Gifts that was recently released. It looks retarded, but the amount of revenue that it’s generated would look amazing to a startup.



Susan Wu of Charles River Ventures, Photo Credit to Jeremy Pepper

Susan Wu made a great point about platforms and marketplaces that I’ve been meaning to blog about for quite some time now. Companies such as eBay, Facebook, MySpace, and all of these virtual games are creating a new platform and marketplace that encourages entrepreneurship. All of these companies have platforms that lower the barrier to entry for entrepreneurs. If you’re in the web 2.0 space, then launching on Facebook will provide both Facebook, the entrepreneur, as well as the user with great benefits that aren’t typically seen by standalone entrepreneurs. I mentioned this concept when blogging about the eBay LIVE conference, because sellers are literally being eBay evangelists. They’re making eBay better because they’re putting their goods into the system, and they’re bettering themselves because they now have a new distribution method for their businesses. Buyers now have an easier way to purchase these goods, and everybody is happy!

The big question going on in my mind is, do I want to develop FOR a platform, or CREATE a platform? The differences include size of vision, business, investment, but not necessarily time. For example, many entrepreneurs will work 80 hours a week on eBay to create a collectibles store, making $3,000,000 a year. Yet, Pierre Omidyar, Founder of eBay worked just as much (if not less) and created a multi-billion dollar platform for entrepreneurship. Risk is involved in both businesses, probably more when it comes to creating a platform, but the question remains – which one do I prefer to do?

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