The Marshmallow Experiment
If they did this with me and a cup of coffee in the morning there’s no way I’d last.
Posted in Funny
Brilliant Move by LivingSocial.com/Amazon
Amazon recently invested $175mm into the group buying underdog – LivingSocial.com. Of course it must be said that for an underdog, they are still doing extremely well – printing money.
I wondered what the first big move might be to establish themselves after jumping into bed with Amazon. Today I found out – $20 Amazon giftcards for $10. Brilliant. They have now far surpassed the $11mm in gross revenue brought in by chief competitor Groupon during their $25 for $50 Gap deal.
As of now they’re up over 1 MILLION sold. We can now count Amazon’s total investment in LivingSocial to be at least $185mm.
Posted in Business, EntrepreneurshipFacebook Dis-Connect
It’s getting to the point where Facebook’s developers should just include a “Give My Life Away” button for Facebook Connect. What percentage of people actually click through and allow an untrusted app ALL of this information? The conversion rates must be awful.
From my experience with CampusLIVE – asking for this many permissions from the user typically puts the Allow button below the fold so it’s not even click-able. This happened to us with 8 requests. RockMelt has an amazing 11 requests for information.
Project Simple #1: Megabus
I don’t want to have a reputation for blog-bitching. This is the tendency for one to only have motivation to write about negative things. Because of this I’ve created a three strikes policy. If a company / service / product pisses me off more than twice, I will write about them simply to educate my fellow entrepreneurs how NOT to run a business. I’m calling it “Project Simple“, as in, if you keep things simple, you’ll have a successful business with happy customers.
This week’s candidate: Megabus
Many would consider city to city bus transit a relatively simple business. Schedule buses, sell tickets for seats on said buses, $$$PROFIT! Peter Pan gets this. Greyhound gets this. Hell even Bolt Bus gets it! But Megabus is a MEGA-PAIN! And as I’ll explain, they aren’t only pissing off customers, they are hurting their bottom line.
1) Overbooking
I booked a ticket to NYC to see a farewell concert for a band I’ve been following. I bought my tickets a week in advance for $40 round trip on the Megabus website. I arrive at Boston’s South Station bus terminal at 12:30pm, for a 1pm bus ride. Somehow, there were more than 100 people in line, for a bus that at most fits 60 people. The bus driver came to the middle of the line about where I was standing and said “You can blame the people in front of you for bringing too much luggage! Everyone in the back isn’t getting a seat on the bus”. They didn’t let me on the bus even though I clearly had a ticket for THIS bus in hand.
2) No Ticket Tracking
We’re in the age of mobile devices everywhere. Merchants have been scanning bar codes for decades, yet Megabus does a visual check of my home-printed ticket to see if today’s date is on it. I strongly believe they do this to backup their illegal “No Refund” policy. They don’t allow me to use my ticket on the bus I’m scheduled for, and when I call for a refund they tell me no refund. If they scanned the tickets of passengers, they would know that I didn’t travel on the bus and therefore deserve a refund.
3) Fees that hurt their bottom line
Being a forgiving guy and believer in flukes – I tried Megabus a second time, to go to NYC for New Year’s. The ride in was just fine and I got only 90 minutes later than scheduled (mostly due to the snowstorm). After a great New Year’s Eve, I headed to 31st and 9th where the buses depart. I got there at 5:25PM for a 6:10PM bus. The bus driver is standing outside the 5:10pm bus to Boston that at this point was 15 minutes late. He repeatedly states “I have 50 open seats on this bus to Boston. If you want to move your 6:10pm ticket to this bus, just pay the women to your left with a credit card”. The cost was $5.00. I passed out of principle of refusing to pay useless fees and went to get a bite to eat. That bus left for Boston late and with roughly 40 empty seats on it.
6:10pm comes around and I am seated on my scheduled bus. Now for this bus, there are roughly 30 extra people trying to get onto the bus and it’s full. These people would have been glad to pay $10, $20, maybe even $30 to get on this bus but there were no seats. Now if only they had simply allowed those 40 seats on the earlier bus to fill up for no additional cost to us ticket holders, they would have been able to sell another 30-40 regular priced tickets.
It’s quite unlikely I’ll ride Megabus again. At least not until they learn how to keep things simple.
Posted in Project SimpleThe Venn Diagram I Should Have Created 3 Years Ago
Over the past couple years the vision and business model for CampusLIVE has significantly changed, in ways I could have never guessed. Overall for the better I must say.
The original goal I set out to solve was organizing everything students were looking for into one, easy to use, website. It’s amazing how university websites actually do the polar opposite of what their visitors actually expect/desire.
If i could recreate the pitch deck I originally went out to investors with, I think the image would sum it all up, without the need for any paragraphs or bulleted lists.
Image from Aimee Knight’s blog
Posted in Business, EntrepreneurshipRip Apart My Idea #1: “Invest In Me”
This is part 1 in my weekly series, where I open my little red book of random business ideas and let you rip one apart – all for the sake of entrepreneurship
A Theoretical Business – “InvestInMe Inc.”
How absolutely crazy it is that the average 4-year college graduate leaves with an average of $25,000 in debt. 79% of med school graduates have more than $100,000 of student loan debt, with the average a mind-blowing $156,000! This debt disease has been proven harmful by decreasing the amount of future doctors, teachers and inventors who would otherwise complete their schooling and go on to help our population for decades, but choose to be able to afford their food instead.
With tuition consistently rising year after year and laws requiring tuition caps unlikely to pass anytime soon, there is no help in sight. InvestInMe, Inc. plans to change this.
InvestInMe’s mission is to help highly achieving students avoid student debt by allowing outside investor(s) to pay for their schooling in exchange for equity in their future earnings. Similar to valuing a company, the student’s value will be determined by a proprietary algorithm combining aptitude, GPA, social characteristics, direction of study and future profession. The brighter the student and higher future potential salary, the better score received. Just as the students are ranked for risk and value, InvestInMe’s private investors are screened to ensure they will be able to meet all costs in the investment.
Let’s take a look at a potential candidate for InvestInMe
- Amanda Johnson
- 18 years-old
- Highschool GPA of 3.8
- Top 5% of her class
- Member of the basketball and softball teams
- Accepted for next years freshman class at Harvard, pre-med
- Wants to become an Orthopedic surgeon – (median salary of $408,000)
- With family contribution counted, she is facing an estimated $194,000 in debt upon graduation – OUCH!
The Business Model
- Amanda agrees to sell “equity” in the value of the first 15 years of salary she will earn post-grad, likely being employed as a surgeon.
- A private investor is matched with Amanda and pays InvestInMe $194,000 for 10% of her post graduate income for 15 years.
- InvestInMe disperses the $194,000 directly to Harvard as tuition bills are presented.
- On April 15th of each year following Amanda’s graduation, she submits a copy of her tax return along with a check to InvestInMe for 12% of the prior year’s gross income. (10% for investor, 2% management fee for InvestInMe)
- On April 30th of each year following Amanda’s graduation, InvestInMe pays the investor annual returns estimated to be $40,800 each year.
Benefits to Everyone
- Amanda graduates med school, following her dreams to become a surgeon, with $0 traditional debt.
- Private investor earns good returns ($40,800 annually X 15 years = $612,000) with relatively low risk, while helping a student achieve their goals.
- InvestInMe earns $8,160 per year for 15 years ($122,400) plus interest on the $194,000 (the float) before it was fully dispersed to Harvard over the 4+ years.
What Do You Think?
Could this business succeed? Post your feedback and questions below to join the discussion.
Posted in Rip Apart My Idea, Uncategorized