For the baby gender business idea, why not offer a 100% money back guarantee for all wrong predictions, no questions asked. You would be right half the time, and that should be more than enough profit considering it costs nothing to run.
That is illegal. What would be more interesting would be to offer to return twice the money, less an admin fee of 10%. While on the surface that appears to break even(ish), you can rely on inertia for people not actually to ask for their money back.
With the 200% guarantee, that might not even be illegal.
EDIT: Finally got to read the actual article and realised that this is already covered. Sorry - /mea culpa./
What law does that break? It seems the same as any other infomercial product's claims: "If this product isn't the best widget you've ever bought, or you're not completely satisfied for any reason, we'll refund your money"
In this case, if the prediction is wrong (not the best widget/customer not satisfied), they can get their money back.
Come to think of it, the prediction claim isn't much different from most test prep higher score guarantees.
In conversation with a UK lawyer it would be deemed illegal as you are misrepresenting the "product" for which you are taking money. It's effectively the same law as covers items sold where they are clearly intended for a particular purpose, but then try to claim no guarantee that they are, in fact, fit for that purpose.
UK law is very broad in its protection of consumers against "products" that are presented in a deceptive manner.
I think the laws are more liberal here (California).
I think if you offered a no questions asked moneyback guarantee for wrong predictions, then the only people paying would be people whose predictions were correct (assuming every person with a wrong prediction requested a refund). You would of course put a disclaimer (as psychic hotlines do) that it is for entertainment purposes only, etc.
"covers items sold where they are clearly intended for a particular purpose, but then try to claim no guarantee that they are, in fact, fit for that purpose."
You mean like just about every software license agreement in the world? ;)
So basically... If there is no "insurance" so that mail a notarized copy of the birth certificate is enough to get a refund, you will never hit the law because the failure to provide an accurate prediction warrants the full refund.
If people get really rowdy, refund anyways. Shoot even if it's late refund. I'd be super lenient with it, you will make plenty of money.
For the U.S., I doubt there are criminal laws to worry about in this case. You can always get sued for "fraud" (not-criminal), but who sues for $50?
About the only criminal area you need to worry about is mail fraud. Which would be fraud while using the U.S. postal service. But that's not a real concern either, as your only using mail to process refunds, not to solicit. You also don't need to use the mail, as you can require faxing or email of birth info. btw, IANAL.
Exactly. The point is that the laws as framed may not cover that situation. Having checked with a UK lawyer friend, though, it would almost certainly still be illegal in the UK, and the only reason I say "almost" is because everywhere, going to law is a lottery with unreliable odds.
Perhaps its anecdotal, but overall, I am hearing a lot more about these types of ideas. Maybe there is a trend to feel a bit of urgency to make money, so people are trying silly things like this.
For me, having a history of never monetizing anything but my time, I can identify with a general sense of urgency. Still, I would probably never do something like this. But, if I did, I would certainly never tell anyone.
Edit: I changed my mind. I'll see you at the Kansas State Fair... look for the booth titled "Will your startup ever be profitable? Two questions will tell the answer. 'Free'"
I really like the idea of refining the questions and their mapping to the answers. If the results increase in accuracy, we may find statistical predictors for how the meiosis and sperm-race play out. Macro-level predictors for micro-level behaviors help us come up with new hypotheses to refine our models.
My attempt at defining scams would be something like "when you're actively using an information/knowledge gap between you and your customer for your advantage".
By that definition, casinos aren't scams: they are quite honest with the "house always wins (but we'll make sure you're having fun)" business model. The gender prediction would be, because this guy knows he's as good as flipping a coin, while anyone paying him to do so will be believing that he can actually do something (otherwise they'll just flip the coin themselves and save the $50).
The "are you going to heaven" guy might actually, honest to god, believe in what he's saying = no scam. (Although if he was, he'd probably be more likely to be explaining how joining his religion will secure admittance to heaven)
No, I still think it makes sense when separating knowledge as the product (consultants) and knowledge of the product (I'm selling you a coin-toss, but you think I actually know stuff). E.g. an IT-consultant who clams he knows everything about computers, but really just finished "PHP and MySQL for Dummies" might be a scammer -- and one I suspect many people here has spend some time cleaning up after at one point or another.
Your morality is subjective and therefore not applicable to a business transaction between to other parties. This is where your thinking fails.
A business transaction is an exchange of money for something of value. The "value" is only determined by the buyer (where the price is non-negotiable). If the buyer considers the product valuable, then the transaction is legitimate. This is why it's legal to sell $100 track pants and call them "yoga wear". The buyer is in agreement that the track pants are worth $100.
You seem to think that there is an ultimate morality that can govern the perception of value, which there is not. Your bargain is easily my rip-off. It's fundamental market theory.
The only time you can call a business transaction a "scam" is when the value delivered is not what was agreed to prior to the event. So, if I tell you I will fix your roof for $50,000, and after I do this it leaks like a sieve, you have a case that I wasn't honest in living up to my end of the bargain, or have not fully lived up to my previous agreement.
If I promise to sell you mythical cherries that make every woman you meet fall in love with you, and you, in sound mind, believe that these cherries work as advertised I am not a scammer.
The ability to exploit ignorance of all shapes and sizes is a fundamental concept of the operation of a free market. I know that this can sound disturbing, but it is true. If I can't benefit from your lack of something, I can never create value for anyone.
When pg says "create something of value" he is really saying "create something somebody values". His clearer definition of the statement is only a caveat - that is, if you think something is valuable, chances are a lot of other people do to. That doesn't mean however that there are a lot of people out there that perceive value in things that you do not.
But what you're describing as a scam is a "mere" breach of contract. I don't think that qualifies as a scam. I'm still partial to a definition that includes some sort of intentional malice, however subjective :)
Except in this case, he would have a 50% success rate. When you compare that to investment newsletters, fortune tellers, economists or anyone else who tries to predict the future, this guy would probably come out at the top of the list.
Most investment newsletters I've come across showcases a significant better than 50% buy/sell recommendation success rate, that's how they get people to listen to them.
All those other guys predict non-binary scenarios. If I try to predict the result of a dice-throw by throwing a dice myself, I'll get a success-rate of exactly 1/6, but when factoring in the number of outcome scenarios, I'm doing exactly as well as the coin-tosser.
Not really. Take any investment newsletter, fortune teller, economist or "anyone else who tries to predict the future" and ask them that same question, "What gender will my baby be?" The worst success rate any of them can have is the success rate of random guessing.
It's not quite 50%, males are born slightly more often than females. Something like for every 105 boys born there are 100 girls. You can stack the odds a little more in your favour by always guessing "boy".
... it's not really an SEO blog. He's was an affiliate marketer who made a lot of money and is now trying to make more by pimping his own brand. He's actually quite controversial in the SEO/SEM/SEWhatever community because of stuff like this: http://www.shoemoney.com/2008/05/07/seo-has-no-future/
I would consider a business a scam when you are knowingly misrepresenting your product. In the baby prediction business, part of the plan involves putting the user through a survey of irrelevant questions, to give the impression that you are somehow using this information to provide an informed prediction about the gender of the baby.
If, on the other hand, you simply said "Pay me $50 and I'll guess if your baby is a boy or a girl" It wouldn't be a scam, nor would anyone pay for it.
To put it more simply, if the customer handing over money depends on them believing something that isn't true, it's a scam.
A prosecutor though would have to prove that the questions were irrelevant, which would be hard to do, unless you blogged about how the questions would be completely irrelevant on your high-traffic website.
All you need to do is link the questions to something. As in:
How many brothers/sisters do you have? More brothers = +1 girl, and vice versa. There is no requirement to have any sort of science behind the reasoning of whether or not your +1 assertion is correct.
I'm surprised the salvation seller is making any money. The most basic tenets of Christianity specify that regardless of the sin, acceptance of Jesus guarantees salvation. How can someone not know this, yet still care enough about the state of their soul to pay $50 for a readout from an explicitly Christian source?
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[ 3.3 ms ] story [ 72.6 ms ] threadWith the 200% guarantee, that might not even be illegal.
EDIT: Finally got to read the actual article and realised that this is already covered. Sorry - /mea culpa./
In this case, if the prediction is wrong (not the best widget/customer not satisfied), they can get their money back.
Come to think of it, the prediction claim isn't much different from most test prep higher score guarantees.
UK law is very broad in its protection of consumers against "products" that are presented in a deceptive manner.
I think if you offered a no questions asked moneyback guarantee for wrong predictions, then the only people paying would be people whose predictions were correct (assuming every person with a wrong prediction requested a refund). You would of course put a disclaimer (as psychic hotlines do) that it is for entertainment purposes only, etc.
You mean like just about every software license agreement in the world? ;)
If people get really rowdy, refund anyways. Shoot even if it's late refund. I'd be super lenient with it, you will make plenty of money.
About the only criminal area you need to worry about is mail fraud. Which would be fraud while using the U.S. postal service. But that's not a real concern either, as your only using mail to process refunds, not to solicit. You also don't need to use the mail, as you can require faxing or email of birth info. btw, IANAL.
There's a reason for that little line.
For me, having a history of never monetizing anything but my time, I can identify with a general sense of urgency. Still, I would probably never do something like this. But, if I did, I would certainly never tell anyone.
Edit: I changed my mind. I'll see you at the Kansas State Fair... look for the booth titled "Will your startup ever be profitable? Two questions will tell the answer. 'Free'"
By that definition, casinos aren't scams: they are quite honest with the "house always wins (but we'll make sure you're having fun)" business model. The gender prediction would be, because this guy knows he's as good as flipping a coin, while anyone paying him to do so will be believing that he can actually do something (otherwise they'll just flip the coin themselves and save the $50).
The "are you going to heaven" guy might actually, honest to god, believe in what he's saying = no scam. (Although if he was, he'd probably be more likely to be explaining how joining his religion will secure admittance to heaven)
Explain to me when you aren't doing that. You've basically described every consultant, lawyer and expert in existence with that statement.
Your morality is subjective and therefore not applicable to a business transaction between to other parties. This is where your thinking fails.
A business transaction is an exchange of money for something of value. The "value" is only determined by the buyer (where the price is non-negotiable). If the buyer considers the product valuable, then the transaction is legitimate. This is why it's legal to sell $100 track pants and call them "yoga wear". The buyer is in agreement that the track pants are worth $100.
You seem to think that there is an ultimate morality that can govern the perception of value, which there is not. Your bargain is easily my rip-off. It's fundamental market theory.
The only time you can call a business transaction a "scam" is when the value delivered is not what was agreed to prior to the event. So, if I tell you I will fix your roof for $50,000, and after I do this it leaks like a sieve, you have a case that I wasn't honest in living up to my end of the bargain, or have not fully lived up to my previous agreement.
If I promise to sell you mythical cherries that make every woman you meet fall in love with you, and you, in sound mind, believe that these cherries work as advertised I am not a scammer.
The ability to exploit ignorance of all shapes and sizes is a fundamental concept of the operation of a free market. I know that this can sound disturbing, but it is true. If I can't benefit from your lack of something, I can never create value for anyone.
When pg says "create something of value" he is really saying "create something somebody values". His clearer definition of the statement is only a caveat - that is, if you think something is valuable, chances are a lot of other people do to. That doesn't mean however that there are a lot of people out there that perceive value in things that you do not.
But what you're describing as a scam is a "mere" breach of contract. I don't think that qualifies as a scam. I'm still partial to a definition that includes some sort of intentional malice, however subjective :)
All those other guys predict non-binary scenarios. If I try to predict the result of a dice-throw by throwing a dice myself, I'll get a success-rate of exactly 1/6, but when factoring in the number of outcome scenarios, I'm doing exactly as well as the coin-tosser.
If, on the other hand, you simply said "Pay me $50 and I'll guess if your baby is a boy or a girl" It wouldn't be a scam, nor would anyone pay for it.
To put it more simply, if the customer handing over money depends on them believing something that isn't true, it's a scam.
All you need to do is link the questions to something. As in:
How many brothers/sisters do you have? More brothers = +1 girl, and vice versa. There is no requirement to have any sort of science behind the reasoning of whether or not your +1 assertion is correct.