When you visit Second Life these days, you will meet a lot of grumpy long time users. The huge success, which SL enjoys lately, is a reason to celebrate of course (for early adopters, who "knew it all along"). It has some disadvantages, though.
With more than 12,000 new accounts every day and the number of concurrent users doubling in a very short time, Second Life's infrastructure is under a terrible stress; not only the technical infrastructure. If you log in to SL at peak times, you will experience slow load times for textures and an unusual amount of "lag" (long response times) - even in former low-lag areas. The system is literally groaning under the load.
What's more: the support structures for newbies can't cope with the flood any more. Volunteer helpers burn out - they have always been too few, anyway. And this support is badly needed. Second Life not an easy system to learn. The consequence is, that many newbies leave SL after a very short trial period - probably for good. Tateru Nino has written an excellent arcticle on this topic.
But this is not simply "bad management" from Linden Lab, as some disgruntled residents would like to see it, but part of a grand strategy - and not an uncommon one for markets like this.
The developments of the last months were heavily critized in many weblogs and forums, with the general qualification of Linden Labs management, which is responsible for the hyper-growth strategy, being put in doubt. The explanation "They are all idots" falls short, of course; like in most similar cases. What we are witnessing actually, is a risky, but quite common gamble according to the rules of Web 2.0 Economy / Social Software Platforms.
These rules are simple and can be summed up with "The Winner takes it all!" Today Linden Lab is more or less without competition in its market segment. (I know, many will argue with that, but - honestly - I don't see any real contender in the market for open, user-created 3D spaces.)
With all of the hoops around Second Life this will change. Growth rates of 20% per month will attract other companies. And - to say it frankly - it is not that hard, to build a better platform for this purpose. Second Life at its core is 5 years old these days. There have been improvements in technology which Linden Lab seems to be unable to integrate and the user interface is not masterpiece from a usability point of view. The learning curve is unnecessarily steep.
On the other hand ... Second Life more than 95% "user generated content"! And the attractiveness of such a platform is based to a large degree on exactly this content (not on the quality of the platform itself). Look at YouTube, MySpace or ... eBay. Every new contender in such a market will start from a very uncomfortable position. "Market entry barriers" is the word. A huge competitor could - maybe - compensate this with a marketing campaign that simply bullies Linden Lab out of the publics visibility. Never forget that Linden Lab is just a small company with less than 100 employees and some 20 Million VC funding - most if which is probably spent already. But even Marketing can not overcome the advantages of a large userbase above some critical size. Nobody could easily challenge YouTube or eBay these days - no matter how much money you spend for marketing.
My personal estimate is, that, if Second Life can grow just one more year without a serious competitor reaching the market, they will have reached such a position. A competitor would have to spend Billions, not Millions, to have a chance for success ...
And exactly this is Linden Labs gamble: Grow as fast as you can to reach this critical mass, and don't listen to the funny sounds from the engine room.
We - as residents and developers - can only watch this game. And it certainly is interesting to watch.
It is is a small risk for us anyway - in the long run: Should Linden Lab win, the growing pains will be overcome in one or two years. Should they loose the game, this will only happen, because some other company has brought something considerable "better" to the market. Switching over might be inconvenient for a while. But in the long run we all would profit from this "better" system. And if Linden Lab wins against a strong competitor, this will only help to improve Second Life through pure market pressure.