Wednesday, April 2, 2008

The Financial Sector in SL™ - sigh

The following is a slightly moddified version of a post I made on the SL Exchange Forums this morning... It's not very positive - but it is from the heart. lol I was commenting on a post about the stock exchanges, and was reflecting on the whole "financial sector" of SL.

The whole series of financial fiascoes in SL in the last year are all predicated on one thing. Greed.

Self-appointed bigshots and experts have fueled the greed by promising big returns only to disappear into thin air. Investors, with dollar signs in their eyes - were eager to believe the lines that they were being fed, while the scammers rubbed their hands in glee at the investors' gullibility. People invested their money, expecting to make easy returns on a house of cards, ponzi scheme, or fly-by-night "investment fund".

Worse than that, individuals with no skills or credentials convinced thousands of others to invest millions of Lindens, all with the promise of huge returns - followed by the inevitable failure of the business, because the person running it was a 19 year old high school drop out who knew nothing except how to spin a good line.

Now - sure there are honest people in the SL financial world, and it isn't fair to throw everyone under the bus because of the actions of some. It isn't fair, but it is totally understandable. And some of the honest fund operators have found themselves turfed and missing a large chunk of their assets.

To say that I have become disillusioned about the whole "financial sector" in SL would be an understatement. I got involved in the WSE early on, to learn, to have fun, and to take on the challenge of running a virtual company, to see if I could make it profitable. maybe I got caught up in the greed as well - i certainly raised a lot of Lindens to expand the business and was able to go from a small land company to a much bigger one using other people's money. I saw an opportunity to grow much faster than I could do alone, and I took it. I was full of pride at how many people were willing to throw their Lindens at me - and I started to think of myself as a "CEO" - a bigshot! Hell, I must be - lookit all these people that think I am so amazing and want to give me their money! But I always worked hard to learn what i had to learn and do what i had to do.

In my naiveté, I thought that everyone was doing it in good faith, and I took on the responsibility of accepting other peoples' money in trust to grow the business. It is a responsibility that i took, and take, seriously. I have tried to be fair and honest when I have done anything in SL, from the beginning to now. It's up to others to decide if I have succeeded or not. But I almost fell into that terrible trap of greed and pride - and I started to believe my own press!

Meanwhile, I watched other business owners cut and run with the money they raised, and was infuriated. Watching the back room deals, and the dishonesty, and the chest-thumping and posturing, made me both laugh and cry at the same time. This wasn't a WSE phenomenon - it was everywhere in SL - the banks, the ponzis, the funds. gah.

As an investor in the WSE, quite aside from my own business, I have been betrayed by people I considered friends, starting back with Montana Ryder, who ran off last summer. Next was Kejo Merlin, who bolted in the fall with thousands of dollars of other peoples' money, including a substantial amount of mine. There have been others since - with my investments vanishing in a puff of smoke. I am left with a pantload of WTF shares, and an aching heart when I think about the betrayal. The worst part about it is that I wasn't even investing in them to make money - I believed in them and wanted to see them succeed, and I thought they were dynamic, ethical people that would make good on their promises. I am a sucker that way.

I have always been one of the most vocal supporters of the WSE - I felt a sense of loyalty to the organization that made it possible for my little land business to have whatever success it has had. I have always wanted to try to assure people that there ARE honest people that are involved in the exchanges - lots of them. I wanted to see the WSE succeed.

And when the WSE reopens (which it will), I still really hope it succeeds, because there are still some good honest people that are involved there, that just want to make something out of their ideas and hard work. not everyone to be sure, but many. They don't deserve to be cast aside.

But I won't be one of the people on the WSE train - now that I have delisted the company and have decided to manage all of the investors personally. This was done as a matter of conscience, in light of my own beliefs and plans for the future. I could have stayed on the WSE and probably done really well. But I couldn't.

I will continue to run the business in order to make sure that anyone who gave me their money during my time at WSE gets it back, with a healthy profit. But the magic has gone out of it - it's not as much fun any more. Swimming against the current is tiring. Sticking to your principles, when many around you are abandoning theirs, is tiring. It makes you feel stupid - like a sucker. When my responsibilities are discharged, I might wind it all down, and do something else entirely - idk. At this point I am just enjoying the freedom of being in control again - being able to work directly with my shareholders to figure out how to proceed.

I guess I just sound like a whiny bitch at this point - I know that I have nobody to blame but myself for my disillusionment, and that whatever I have done, I have done with eyes wide open. And in the end, I have been successful, have had a great time, most of the time, and really have no reason to complain. But the greed and avarice of many of the people that have coopted the financial scene in SL is disheartening, and they have made it hard for me to trust anyone at all. I am not slamming any of the exchanges - I don't know much about them other than WSE. But I have decided to trust the one person that I know I can rely on. Me.

Comments appreciated...



Guardian Market said...

It can be frustrating and disheartening, but ultimately I hope people have learned from their experiences in the SL markets. Even if their only experience was to lose their $30 in the markets, that should give them some understanding which will help them when they invest much more in real life markets. The comparison is not firm, but due diligence is required both in SL and RL.

Oh, and you have been a good CEO, Delicious. No doubt about that.

Anonymous said...

Hello DD. I am very disillusioned about SL's financial sector as well. As for what’s going on at the WSE,..well,..that speaks for itself. Sorry you’re suffering when you did nothing wrong. Also, all the nonsense of banks taking deposits and then issuing stocks instead of paying people back is just plain fraud. If they took the Lindens in the first place, they should have had arrangements to pay them back by now. My bank Crystal Springs Land and Loan was the only bank to pay people back the day LL banned banking, at 100% of cash values. Many scammers still owe their depositors money or deleted their accounts, and they should be ashamed of themselves.

I am very careful whom I trust large amounts of money with nowadays. Only those that I have verified identities on the phone or have met in rl will I do serious business with. Even then, there are still risks, but I have found this minimizes the potential for loss. I made a 50,000 Linden mistake with SkyRanger Hammerer back in November 2007,...and now it looks like SLCapex seized the assets and gave them to Sully Okelly, and I'm getting nothing. This is just another asset grab at SLCapex, which seems to be the norm there anymore by Bogart Beck and his inner circle.

I am proud that my company has paid L$400,000 in dividends in 31 days, and I am out to prove that there are still honest, open, transparent CEO's left in Second Life. It's a shame that other CEO's and exchange owners don't hold themselves to this high a standard.

Continue your great work and posts,...people I know only have good things to say about you and your company, and that’s rare these days. Keep your chin up, and just move forward :-)

Skip Oceanlane, CEO
Crystal Springs Land and Loan
Crystal Springs Virtual Capital

Zadruk Zabelin said...
This comment has been removed by the author.
Zadruk Zabelin said...

Needed to re-word my previous comment... eh-hem... the jist of which was basically that I felt the following - [in the current context] - is a little akin to handing out party poppers at a funeral...

"I am proud that my company has paid L$400,000 in dividends in 31 days, and I am out to prove that there are still honest, open, transparent CEO's left in Second Life. It's a shame that other CEO's and exchange owners don't hold themselves to this high a standard."

I then went on to say...
kids apologise to get themselves out of trouble, when they do so you tell them that the way to prove their contrition and trustworthiness is by changing their actions...

Del has proven that she gives a shit about people, others have proven that they don't.


nyrounder said...

I didn't mean any offense, Zadruk. I'm simply stating that on Vstex, my company has been free to operate, and is doing so at a profit. It shows that SL finance CEO's shouldn't be having a funeral,..they should just be operating with more trustworthy stock exchanges.

I'm sure an excellent CEO like DD could do business on Vstex and be even more profitable than me. She has a lot more SL financial experience,..she unfortunately was just on a stock exchange that had a con artist as an owner.

I apologize to DD and Zadruk if my comments were taken wrong. I'm not "celebrating",..I just was making a point. Maybe I didn't get it across properly.

AKA Skip Oceanlane

Delicious Demar said...

No offense at all, Skip. I have followed your company somewhat and you seem to have been one of the few whose actions mirror your words. I appreciate the kinds words as well. :)

Zad, I don't think he meant to promote himself unduly - just wanted to mention that some companies HAVE done what they said they were going to do - of which his was one...


sevenseals said...

Recently I took a look in my "traders book", where I noted down all my trades and I saw the overall loss That I made with all the WSE companies. After that I deleted the file. I don't want to see that amount again. It was 4.000.000L$.

At that time I thought I was careful enough, because I had good contact with all the CEO's before and while I was invested. I believed in the success of Second Life and at that time I believed that the CEO's tell me the truth. I invested only in virtual land corporations because it seemed to be promising. I didn't want to make fast money but I wanted to be invested in a fast growing business.

The most loss I hase with KJL (Kejo Merlin). I never had thought that he will screw the investors. I had very good contact and talked often with him. And he was praying nonesty and fairness.

In real life I'm normally a carefully investor and I only invest in european and american blue chips.

I think I've learnt my lesson.

Regards, Eric

Jeb Gibb said...

As I finish this post made by Delicious I've had to sit back and reflect on my time at the WSE. I've had a blast and I'm looking forward to the WSE opening back up which it will and to see the new upgrades there is. I've had a one on one relationship with Delicious in terms of Business she hads always been heartwarming and as well as she has a conscience. Delicious Demar hads been a acceptional CEO one that I've looked up to and encourage other CEO's to follow in her footsteps. I hated to see her to delist from the WSE but it was all for a good reason and like she said it isn't as fun as it once use to be to her and I've see why. The way the SecondLife Economy hads been working this last year hads been drastic and alot had to do with Third Party Exchanges trying to get rich off those certain people who invest with their emotions. I'd like to give Delicous Demar her profts fro what she hads accomplish here at the WSe and what she will in the future. Take Care Delicous.
Kind Regards,
Jeb Gibb

pj said...

That article was right on. One of the best written ones about sl i have seen in a long time.

Anonymous said...

One begs the question - why is it that when a company goes bad in SL - it goes really bad.
Look at the differences SL and RL.
In SL all ownership of "company" assets are that of the "group" or the AV. The shareholders in SL actually have very little control over the company, its direction, or voting on those who have empowered themselves to run it.
I liken investing in SL as investing in someones vision - and because of that, they may not have the experience to run it, let alone know what to do - or how to control it when things get too big, or the enormity and pressure due to falling share value etc is beyond them.

There are no liquidators - more often than not, what your investing in disappears when the visionary leaves, there are no pieces to pick up, often no assets to distribute.

There's some food for thought
Romen Miles

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