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It's been a good year for Sibley Verbeck, known as Sibley Hathor in SL. In the last twelve months, his "interactive creation" agency The Electric Sheep Company (ESC) has bloomed from a handful of employees to over 25, and has also had a hand in almost every major RL corporate experiment being tried in the grid these days -- from a virtual hotel for Starwood to a new stadium for Major League Baseball, even an entire recreation of Laguna Beach for MTV. And in the meanwhile, ESC is also becoming more and more the "go-to guys" for the mainstream media, whenever a confused reporter needs a little help figuring SL out; recent mentions of the agency in the press include CBS, CNBC, Business Week and Popular Science.

What's the secret to their success? What are the challenges of bringing the grid to a suit-and-tie corporate world? And most importantly, will the staff be dressing up as their avatars again at next year's SL fan convention in San Francisco? I recently had a chance to sit down with Hathor at the Electric Sheep headquarters, where we discussed all these issues and more; part 1 of the long, long transcript can be found below, with part 2 coming on Monday.

In The Grid: So why don't we start with this? That what you guys do is so new, there's not really even a name for it yet. Do you consider yourselves mostly...what, a marketing agency?

Sibley Hathor: No. As a longer explanation, I say that we are building interactive, 3D virtual experiences for real-world companies. That's sometimes about marketing, but just as often about other aspects of a company's goals. And we do work in partnership with marketing/PR/advertising agencies sometimes. We explain to non-SL users that what we are doing is a lot like building an interactive theme park. At least for projects that involve building a location in SL. Other projects are less focused on a place, so then sometimes they are more like marketing, but in other ways are more like actual product design and strategy. A lot of the consulting we do is just trying to help businesses understand what would be useful for them to do in Second Life or other virtual worlds.

ITG: I should say, you've got to be one of the only companies around, SL or RL, that combines copywriters, futurists, computer progammers and architects on the same creative team.

SH: [Laughter] That's true.

ITG: How difficult is this to get across to potential clients, the need for both physical space and marketing to go hand-in-hand in the grid?

SH: It all depends on the client. Some companies are already used to thinking about the Web 2.0, MySpace, user-generated video on the web, or even videogames, and so it's not so difficult for them to understand that this is a next platform. Other companies are not so active in new types of media, so it's a huge leap. It varies wildly, which is part of what makes this such an interesting job to have.

ITG: Do you find that clients ultimately have to become residents and port in for the first time, to finally sort of "get it?" Or does a simple explanation, like "Snow Crash meets MySpace," do it for some of these younger executives?

SH: Yes, I think [becoming a resident is important]. Of course not everyone in the client companies do that. But people need to see it first-hand, for sure. Most people haven't read Snow Crash and most people in business don't have MySpace pages, so there you go. But in some ways, this is almost more accessible visually than either of those other two references, because SL has such obvious analogies to real life. Some people aren't into science fiction or blogging/making web pages, but everyone moves around in a 3D space, goes shopping, makes friends, etc. So once you see it, especially in a large size projected on a wall, it's easy to "get." But of course it's one thing to understand why it's interesting, and another thing to demonstrate how it can be useful for a business.

A virtual Laguna Beach for MTV. Photo courtesy The Electric Sheep Company.

ITG: Is that part of ESC's strategy, to get your client liasons actually playing each day, so that they'll become more of internal champions for that company's SL experiments? Or is that not really a priority for you all? In other words, do you try to schedule in-grid meetings with clients and the like?

SH: That's still much trickier, becuase no real-world businesses have yet made much money by using Second Life. It depends -- it isn't realistic in most cases to get people in a client organization in SL on a daily basis. But it does often happen as people get fascinated by it, and clients are typically better-off if they do. We do see and meet our clients in Second Life sometimes, [although] it's still an inefficient platform for many types of communication; such as this interview, for example. Voice is much much faster.

ITG: Of course, I would imagine that for a SL project to germinate in any large RL company, there has to be a regular resident there in the first place even suggesting it. Or is this not the case? That same person who was the only one on the web in 1994, perhaps?

SH: No, not initially. Companies are seeing so much press now that they are feeling like "we need to figure out how to use SL;" and then they call us or Linden Lab or someone else. So they aren't necessarily already using SL at all.

ITG: Ah, so you're finding that companies are getting smarter about catching onto this stuff, then? They were notoriously slow, many of them, to catch on to the web.

SH: Yes, no question. Many companies feel "we missed the boat on the web; let's not miss the boat on virtual worlds." Sometimes we get approached by companies who are looking at a higher level -- not SL-specific, but just generally looking for a direction relating to virtual worlds, or even games.

ITG: That brings us to a question I wanted to ask, based on an interview you recently did for Second Life Insider. ESC's portfolio, in fact, is starting to look like a Who's Who of famous corporate entities here; MTV, Major League Baseball, all the other recent clients. But you said in that interview that you all haven't recruited a single one of them yet; that they've all come to you. Do you know in most cases how they heard of you? Was it through other successful projects, mostly?

SH: Good question. Yes, it comes partly through other projects, partly through things we do to get our name out there, such as sending Jerry [Paffendorf, ESC's "Futurist in Residence"] around to conferences, sponsoring 3pointD and the Metaverse Roadmap, etc. Sometimes they even just go down Linden Lab's developer list.

Major League Baseball's new stadium. Photo courtesy The Electric Sheep Company.

ITG: Okay, I was wondering about that middle part. For being mostly a virtual company, how important is the old-fashioned pressing-flesh events? Conferences, talks, social events and the like?

SH: They're pretty important. We're internally virtual, but to get projects and maintain great relationships with real-world companies, we have to go to them in person, and then market ourselves in person as well. If all these companies were already conducting business in SL, then maybe we could visit them there; but for now we have to go into their 3D world [laughter].

ITG: Does that then make the physical RL location of some of your employees important? Do you need a tech evangelist in Silicon Valley, for example, to make sure you're at all the TechCrunch events? Or does it center mostly around special annual events for you, like the circuit of all those endless camps and foos and bars and whatnot?

SH: To some degree, yes, [location is important]. Forseti [Svarog], our head of business development, is in New York City, so it's easy for him to meet in person with clients there. Thankfully we have Jerry for the endless circuit. And then we travel some to other locations. I'm moving to Santa Cruz next year, so then we'll have a Bay-area presence as well. Our biggest group of employees is in NYC currently.

ITG: And now, let's also admit that you're not the typical "housewife suddenly does good" story here. Three years ago, for example, you were named by MIT as one of the top tech innovators in the country under the age of 35.

SH: I suppose I can't claim to be a housewife, unfortunately. But I can claim to have spent plenty of time on a farm growing up!

ITG: So what I wonder is how much of this is tied with the level of client you all are getting? If a college student wanted to do it on a smaller scale here, for example, could they do all development work in the grid, in your opinion?

SH: Yes, I think so. There are a lot of projects out there looking for developers; everything from universities to individuals to smaller businesses who are just looking to dip their toe in the water.

Starwood Hotels' "aloft." Photo courtesy The Electric Sheep Company.

ITG: Is there room for other agencies here? Ones, maybe, that only handle clients that are SL-exclusive as well?

SH: There's a lot of room, certainly. Not that I want more Electric Sheep Companies [laughter]. But the truth is, the interest is growing very rapidly. And there's a lot of work, from small projects an individual could do to larger projects.

ITG: Well, yeah, assuming for a moment that you're not actually encouraging competitors from forming. What do you think just the market overall is looking like for this stuff?

SH: It's very hard to tell. In the last few months, interest has skyrocketed. But it's hard to say how that will keep up once the "we're so cool because we're the first company of type X to do Y" story is over.

ITG: Is the grid turning into a place where a serious company needs the help of an agency? Or is it mostly still limited to those RL companies who have a tremendous brand quality to uphold? Say, the part-time companies here; the housewives, the college students, who have started up retail stories and whatnot. If they want to be serious about turning a profit, can they still do everything on their own, like they have before?

SH: I think so. But the most successful in-world businesses are getting to the point that they would benefit from the same sorts of help any business benefits from. Maybe not yet, but soon. PR, marketing, etc. That isn't something that we provide, but others are interested in doing so. The economy in SL will keep growing, and if SL is truly successful, will become a global platform for all types of commerce. There will still be small shops in SL, and there will be some that grow and could use help with many business functions. It will be a fascinating thing to watch. No one really knows the degree of difference between SL business and RL business; but it's still business, so many of the same challenges apply. Somehow you have to attract customers, keep them happy, out-compete competitors, etc. If you want to grow the scale on which you do that, it takes various kinds of expertise. Any entrepreneuer has to eventually figure out what they're really good at and what they need help with.