Top five business models for successful grids

I occasionally get emails from people starting new OpenSim grids, and wondering how they’re going to pay for them.

Here are the top five ways that OpenSim grids find success.

1. Commercial grids

These are the best-known grids, typically because they put the most time and resources into sales and marketing.

They make their money by renting land and by making commission through currency transactions.

The most common way to charge for land is to set up PayPal forms on their websites, though grids use other payment mechanisms as well, including in-world payments.

(Image courtesy Kitely.)

Grids typically offer a handful of the most popular configurations, with limits on the number of simultaneous visitors and prims. Users looking for other configurations would typically contact the grid’s support staff and ask for what they need.

Island Oasis has a particularly slick interface:

(Image courtesy Island Oasis.)

The Great Canadian Grid also has a grid of the most popular options, and clicking on a particular offer takes users to a simple PayPal payment form.

(Image courtesy Great Canadian Grid.)

For currencies, grids either roll their own, use Podex to create a currency for their grid that can be traded on the Podex exchange, or use the Gloebit payment system. Gloebits can be spent on any grid that supports the currency, and is becoming increasingly popular with hypergrid-enabled grids and users.

Grids can also have multiple currencies. For example, several grids are currently testing the Gloebit system, with some regions using the grid’s existing in-house currency or Podex currency, and other regions using Gloebits.

Gloebit gives grid owners a cut of every transaction that takes place on their grid, currently set at 1 percent. Gloebit itself takes 2 percent of each transaction to cover its own costs.

How do grids set all this up? If they are owned by developers, they typically build everything themselves from scratch, or use open source modules.

Everyone else goes through a hosting service that takes care of all the infrastructure for them. Dreamland Metaverse has been the top-rated provider for the past few years, with newcomer DigiWorldz the second-favorite choice in last year’s reader surveyOther hosting vendors are here.

Typical services include OpenSim grid configuration, setup, management, and backups, website, currency, and technical support for end users.

Grid owners typically get discounts for purchasing large numbers of regions, and price their land so that they can cover their hosting costs, personnel costs, investment in content and events, and then make a reasonable profit.

2. Non-profit and donation-supported grids

A grid doesn’t have to make a profit to be successful.

OSgrid, for example, is the largest and most popular grid running on the OpenSim platform, according to our last stats report.

The grid has a number of donation options on its website, using PayPal.

OSgrid also has a partnership set up with Amazon, where it gets a percentage of all purchases made through Amazon’s Smile program. A grid has to be a registered non-profit to participate. OSgrid is an official non-profit, which also means that direct contributions are tax-deductible.

Another non-commercial grid that accepts donation is Metropolis.

In addition to soliciting donations on their websites, successful non-profits also hold fundraisers, sell merchandise, and recruit sponsors. All these are potential options for OpenSim grids as well.

3. Niche service grid

My personal favorite business model for grids is the niche service grid. Success is measured in how well the grid meets the needs of its constituency.

Take, for  example, Nara’s Nook. It’s not the biggest or busiest grid, but it has ranked very highly in our reader surveys because of what it offers.

Paradise region on Nara’s Nook, at world.narasnook.com:8900:Paradise.

Nara’s Nook is the top OpenSim destination for writers looking for community. The grid provides content, events, and virtual space to writers. It also rents out land, with fees set just high enough to cover server costs. Users can create local accounts, but almost all have their accounts on other grids, and visit Nara’s Nook via hypergrid teleport.

You can use a hosting company to set up a grid like this, or run it yourself if you have the skills and the server space. Letting users keep their primary accounts elsewhere will lower overhead.

4. School or company grid

Education and collaboration are two hot uses for OpenSim. Schools, government agencies, and businesses either set up their grids on their own, or use a hosting provider.

Dreamland Metaverse is particularly popular with enterprises, and offers a range of enterprise-focused services. For example, Dreamland can instantly create hundreds of new user accounts — one for every student or employee. Or turn off those accounts in bulk when they’re no longer needed. It can also set up roles, so that, for example, teachers can upload content or travel to other grids, but students cannot.

School and companies typically get their starting content by downloading free, pre-built Linda Kellie regions from Zadaroo. The content is hosted by Zetamex Network, another OpenSim hosting company.

5. Group or personal grid

Finally, if all you need is a grid for yourself or your friends, then you can set up your own grid.

You can either get a commercial hosting company to do it for you, or set it up for free on your own computer.

DreamWorld. (Image courtesy Fred Beckhunsen.)

For example, Dreamworld is an easy-to-use installer. Setting up a brand new mini-grid takes just a few minutes — read our review here.

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maria@hypergridbusiness.com'

Maria Korolov

Maria Korolov is editor and publisher of Hypergrid Business. She has been a journalist for more than twenty years and has worked for the Chicago Tribune, Reuters, and Computerworld and has reported from over a dozen countries, including Russia and China. Follow me on Twitter @MariaKorolov.

  • Han Held

    “You can either get a commercial hosting company to do it for you, or set it up for free on your own computer.”

    Alternately, if you’re confident or foolhardy -you can set it up … on your own rented server (eg soyoustart) -that’s what I’m doing (not with SYS, tho). The advantages are that I can fire up and take down as many regions as I want, no extra cost, and I have both full control (oars, iars, etc) as well as a better network connection than being on a cable modem.

    • Carlos Loff

      One thing that is very important when we own a grid, and I had one for several month, is the huge extra responsability any grid owner holds

      Lost inventory items, lag/performance, avatars accounts, inventory weight, all of that will be on your shoulders and customer service may have a big load and stress when you go commercial or start charging for land and currency

      A great solution can be what Digiworldz offers – You pay for a dedicated server and can create or delete whatever lands you wish but the lands are on Digi and you enjoy a dedicated page for registers and landing zone, yet all the responsability on the issues stated above will fall into Digi, so you sleep very light and non stressed, also people will not be afraid of you closing down and loosing their account because they are part of Digi, also everything is backed up properly

      It is just an example because I dont know other providers of this same system

      The only thing Digi needs, and they told me it’s coming soon, is a selfservice online panel for most regular operations

      • Da Hayward

        Yes Carlos I agree.
        This is a very good option and as you know we have done the same thing.

      • Han Held

        I’m very happy that you love digiworldz etc etc.

        However …I’m not particularly interested in being a walking, talking commerical, I’m more interested in giving those who want it the power to control their grids from top to bottom by pointing out a third option in response to what Maria wrote.

        Digiworldz is a great company and they would be one of the first providers I’d recommend for those looking for that, but at the end of the day it’s still **someone else’s grid.** For those who want to both maximum control and power …and are willing to do the work; renting their own server from kimsufi or similar is a viable option.

        “The server load is only from you and no one else will share the server like on regular regions renting”

        Soyoustart and kimsufi (both by ovh) sell baremetal servers -you don’t share them with anyone -so that isn’t relevant to anything. You’re thinking of VPS’ which can be used to run opensim but can be flaky for reasons that you pointed out; though I do have a VPS from a seperate company I use just for backups.

        • Da Hayward

          Yup each to there own.
          But I think Carlos was meaning that in the case when his grid was a grid within a Grid, like us he rents the servers, the host grid sets up everything one them for us and handles all the bits like currency, login’s etc. It does free up our time quite a bit. So i would suggest it could be a good option for a few.
          But then again I think all of us have our own views on what we want out of Open Sim.
          At the end of the day everyone should define what their own needs and wants are first.

          • Han Held

            There’s nothing wrong with that, at all. The security and maintenance issues do take up a lot of time and energy. It’s a lot of work.

            I’ll go even further and say that for *most* people, they would want to go with a hosting service such as Digiworldz, Dreamland metaverse or similar. Particularly if you’re going to have customers on top of everything else.

            I agree 110% with you that each person comes into opensim with their own needs and expectations and they should sit down, figure out what those are and then find the service that works for them.

            One of the great things about this platform is exactly that it *is* so versitile. There’s a lot of options for all level of skill-sets and interests (one may be skilled enough to admin, yet have no interest or time to do so).

  • Tony Anytime

    Maria, you forgot the AviWorlds business model…. whatever it is this week. Seriously, I wonder of the first three models, how many actually make a full time living of their business. My servers, full servers not VM, cost me about $150 a month, I can run about 20 full paying regions on them. If I sell my regions for $5 a month, that is $50 per month gross profit per server. If I want to make $2000 a month, not a large salary for a tech guy in the US then I need 40 servers or 800 paying regions. That is hardly a model from which I can hire a system admin tech. So even if I want to have a net profit to hire a tech part-time, I need to double the numbers. So I wonder how many OpenSim Hosters make enough money to pay their mortgage, car payments, and kids schooling from it. I hope I am totally wrong, please someone tell how to do it at a profit. A profit means you clear $2000 every month for your 40 hours of work per weeks. Otherwise from a income point of view you are better working at Walmart. If you make $800 it is a hobby.

    • Han Held

      >Seriously, I wonder of the first three models, how many actually make a full time living of their business.

      You’re assuming that is their goal. To the best of my knowlege (and I may be wrong), the admins of both osgrid **and** metropolis have day jobs, and I don’t believe that nara makes a living off of her grid either.

      There’s different meanings of the word “success” -“success” only means “having a goal which you achieve”. If your goal is to host a platform where folks can be creatively engaged, that doesn’t necessarily require profit (only money …which may come from other income sources).

      In my opinion, you can’t make a profit or a living from opensim, not $2,000 a month. Particularly not with the “race to the bottom” economics of increasingly lower region prices.

      This **IS** a hobby platform, not something to count on feeding your family on. At least that is (and has always been) my opinion.

      • Tony Anytime

        Thanks you for saying it clearer than me. Exactly my points, but we need to change this or OpenSim will die. The only reason SL has grown and has lots of developers is they make a decent profit at it. We need to find a way to make OpenSim profitable and stop the in fighting about content, and prices going south. Understand I am not looking down at people that have day jobs and then support OpenSim. On the contrary these are very skilled people that should be paid so they can spend even more time doing what they like. There has to be a better way.

        • Da Hayward

          so true,

        • Alex Ferraris

          lol

        • 1derworld

          lol, Opensims was not designed to be a SL 2 that’s for sure. Opensims was designed originally to be a free platform unlike SL. Where did all the greed come from? Where did the race to sell more regions than the next guy come from? Yes I agree with you if anything will kill opensims will be greed. Such a shame.

          • Tony Anytime

            Actually, I was thinking in the words of that “great humanitarian” Gordon Gecko, Greed is good!. The problem is short term greed, we need long term greed. I believe there is plenty of money to be made in the future. In RL, I work a lot in the funding and development of Ai an VR projects. The crap that is out is incredible. OpenSim besides its short comings could still be a world class VR environment. But unless much greater funding for development. If it was a private entity someone could sell it for 20 million dollars and someone would spend $20 million on fixing it. And it would be worth a billion. Instead we argue about $20 a month.

            I have a proposal of a $1 month region tax paid to a OS development fund. Each region owner that paid gets a vote on development funding uses and advertising to grow user base. We vote on a president and we run it like a company. With some real money. OSGRID would be ideal to do this, but I am not impressed with some of their past antics. Or perhaps Metropolis. Anyway some kind of structure.

            BTW someone might say a $1 a month on regions is a lot of money. Well it would cut down on a lot of crappy regions that no one goes too. Let us face the fact that the numbers of regions means nothing unless there are people going there. Number of avatars means nothing. Numbers of real engaged people, which is what is not growing means everything.

            Let us use greed to save OpenSim…

          • 1derworld

            Opensims now is the 2nd coming of Avnations being the same 2 that worked on that grid now are the only 2 working on opensims. Yes is good to dream but the monopoly of our type of virtual worlds is run by SL only. That
            will never change, If you been keeping up with the latest direction of opensims do you see a different direction
            other than the one in place? We all need to accept what it is, And myself are kinda happy with what we got
            presently. If one wants something different than not sure whats out there to try. Was a saying “Can’t fight city hall”

      • Alex Ferraris

        Hmmm I see

        • Cinder Biscuits

          Don’t see it, FEED IT.

    • Alex Ferraris

      lol really?

  • Suz Blessed

    ZanGrid offers a variety of regions. Clicking on one of the options brings you to an order form that has to be filled out and people get the option to pay with a creditcard of their choice or Paypal. 10% of the income made by region leasing will be send monthly to WWF. https://uploads.disquscdn.com/images/217ce7369c1f38906d274ae8415c36ccd6fb8e926ecc439dbe7ef3e819792be2.png

  • Alex Ferraris

    It has come to my attention that most open sim developers have quit because they don’t agree with Ub and the direction he is taking the project. I say this to the developers who are complaining and quitting. Stop crying and do something about it. Perhaps open up a new open sim Dev branch the way I guys want. At least Ub is doing something and working everyday!
    Quitters are losers and cry babies!

    • lmpierce

      Hi Alex,

      The comment is permissible at this point… your admonition is a general attitude towards “quitters” and not a specific person. But please consider that each developer that leaves a project has individual reasons, and not all complaints are “crying”. There are untold instances of people of mature character who part ways with others because of differences… that’s life. We should also keep in mind that when people volunteer, the only reward is the satisfaction of the process – when that diminishes, for whatever reason, why should they stay in that situation?

  • guest

    This is a great article that really points to how to create a more professional business, Sadly, I am a resident in Inworldz and since we have not modernized the website in four years and handicapped the forum into a mess, the old one filled with spam from spammers undeleted is disappointing to the new one that most residents never wanted, I think the new one was to get everyone to stop talking as they stated the forum was toxic but the last founder can not see if she silences everyone then who will want to stay? is that not toxic in itself?

    Inworldz has not followed any of these recommendations and suffered for it in the last few years, Secondlife has updated it’s website twice since then.

    A website is the very first impression and when people see an outdated site filled with spammers comments why even bother.

    I have stopped offering advice as the last founder has reacted to me more then once as if my intents were not for the good as if not a meaningful suggestion by a customer.

    I think any serious grid not taking maria’s helpful points should look at the Inworldz site, it is not even professional in presentation or function. while I feel it has been a major reason for the decline but as days turn to years no response has taken place as if it does not matter.. who will invest themselves in Inworldz if for all intent or purposes when it appears Inworldz is not investing in itself?