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Like the ancient rite of the cartoon showing man’s best friend sitting at a computer screen: “On the Internet, nobody knows you’re a dog.” The avatar is the most conspicuous online manifestation of people’s desire to try out alternative identities or project some private aspect of themselves.(The word, which originally described the worldly incarnation of the Hindu god Vishnu, was popularized in its cybersense by Neal Stephenson in his 1992 cult novel .) Broadly defined, “avatar” encompasses not only complex beings created for use in a shared virtual reality but any visual representation of a user in an online community.These online personae, called avatars, range from simple but personalized cartoonlike characters used as pictorial signatures in instant messaging to fully developed characters in virtual worlds.And they represent a huge population of “shadow” customers who can be analyzed, segmented, and targeted.But these folks aren’t android-like in appearance or in action: Their outfits are elaborate, and most of their gestures—a nod, a shrug, a beckoning arm—are quite realistic.Some things in this virtual world may seem bizarre at first. In , you live in a new body and take on the identity of your “avatar”—that is, a being you’ve created as a representation of yourself in this online environment. Nearly everything in this world—which encompasses 50 virtual square miles and would take days to walk across, although you can save time by flying or by instantly teleporting yourself from one place to another—has been made by residents.Of course, the human behind the avatar controls the money in the real-world wallet.But the avatar, as a distinct creation of the user’s psyche, can influence its creator’s purchasing behavior and even make its own purchases of real-world products in the virtual world, deliverable to the user’s real-world door.

Clearly, many of ’s 100,000 or so residents are highly involved with this place.

Birdsong and a gentle breeze enliven the scene at dawn, and as you walk by a house later in the day you may hear music emanating from an open window.

When people approach you to chat—their hands typing on an invisible keyboard to indicate that a line of dialogue will soon appear on your screen—their movements are slightly awkward.

In this article, which expands upon an item in “The HBR List: Breakthrough Ideas for 2006” (HBR February 2006), the author examines early efforts to market real-world products in virtual worlds.

He argues that companies need to quickly look beyond the market itself and think about the potential customer, which may be the avatar rather than its creator.

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  1. It is based on the premise that a single action, no matter how small, affects others in the world forever.: In addition to a Whisper-like anonymous posting function, Butterfly Effect users can “give gratitude” (send thank-you notes to friends), “get inspiration” (view inspirational quotes from people like Thomas Edison and Audrey Hepburn), or post to a personal photo journal.