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Stop The JerkTech

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Re: Stop The JerkTech

#41

Post by wpietri »

bhauer wrote: post #37
wpietri wrote: post #10

Earlier quoted context omitted.

I mentor at startup events, so I know exactly what kind of people they are. The good ones are people who just haven't thought it through. They've found some sort of demand, and they're doing the standard hack-the-system thing that the startup culture trains them to do. Once it's rolling, it's like Mencken said: "It is difficult to get a man to understand something when his salary depends upon his not understanding it…

> it's like Mencken said: "It is difficult to get a man to understand something when his salary depends upon his not understanding it." H.L. Mencken? The Internet appears to ascribe that quote to Upton Sinclair.

Sorry! When I searched for the quote, I even typed in "sinclair salary". No idea how Mencken crept in there.

Re: Stop The JerkTech

#42

Post by codezero »

wpietri wrote: post #10
bunkat wrote: post #5

Whenever I hear about these I always wonder what the people that found them are thinking. I mean, what type of person would you have to be to decide to try and screw over the restaurant industry (which already has historically low margins) just to make a buck? I can't even imagine how many fake reservations they would need to create to make that idea worthwhile for them. And what investors would give them money to do…

I mentor at startup events, so I know exactly what kind of people they are. The good ones are people who just haven't thought it through. They've found some sort of demand, and they're doing the standard hack-the-system thing that the startup culture trains them to do. Once it's rolling, it's like Mencken said: "It is difficult to get a man to understand something when his salary depends upon his not understanding it…

This is exactly right, from the creator of ReservationHop:

"To be honest, I haven’t spent a lot of time thinking through these questions." http://brianmayer.com/2014/07/how-i-became-the-most-hated-pe...

Re: Stop The JerkTech

#43

Post by neumann »

rahimnathwani wrote: post #32
wpietri wrote: post #22

Earlier quoted context omitted.

Scalpers do not create value. At a concert the value is being created by the performers, and it's not like scalpers create seats or make the show longer. They just shift value around to people with more money.

Scalpers do create value. After a complete scalping transaction: - the original ticket purchaser is happier with the cash received than with the ticket they had before - the final ticket purchaser is happier with the ticket than with the cash they paid - the scalper is happy with his/her profit - the promoter's/venue's revenue is unaffected So, three people are better off. Value has been created.

I do not understand this logic.

What original ticket purchaser? Scalpers aren't like eBay. They have bought up the tickets from the venue at certain amount, depriving others of a limited resource at that same value, and now offering it a higher value to people who didn't have the means to buy it as fast as the scalper.

The disruption the scalper is introducing into an existing system benefits nobody but themselves.

Re: Stop The JerkTech

#44

Post by benatkin »

bunkat wrote: post #5

Whenever I hear about these I always wonder what the people that found them are thinking. I mean, what type of person would you have to be to decide to try and screw over the restaurant industry (which already has historically low margins) just to make a buck? I can't even imagine how many fake reservations they would need to create to make that idea worthwhile for them. And what investors would give them money to do…

The restaurant probably gets about the same amount of money on average, if not slightly more. It's easy to say that the jerk that uses this kind of app leaves less of a tip or takes up table space longer without spending more but on closer examination I don't see why this would be the case. They likely just pay more overall, and the app gets the extra.

Re: Stop The JerkTech

#45

Post by usefulcat »

Andys wrote: post #33
bunkat wrote: post #5

Whenever I hear about these I always wonder what the people that found them are thinking. I mean, what type of person would you have to be to decide to try and screw over the restaurant industry (which already has historically low margins) just to make a buck? I can't even imagine how many fake reservations they would need to create to make that idea worthwhile for them. And what investors would give them money to do…

Maybe the restaurants could enjoy higher margins if they made great websites which let you bid for last-minute reservations?

Because talking to a human for 30 seconds is that much of a chore when making a reservation?

And how, exactly, would that do anything to prevent reservation scalping without adversely affecting the user experience of making a reservation or making life even easier for reservation scalpers? Probably it will be easy to use and easy for scalpers to screen scrape, or the UX will be a some kind of CAPTCHA-filled monstrosity.

Now that I think about it, forget about restaurants and reservation scalpers; if you could develop a truly superior CAPTCHA replacement, that would be orders of magnitude more valuable.

Re: Stop The JerkTech

#46

Post by lotharbot »

onewaystreet wrote: post #38
bunkat wrote: post #5

Whenever I hear about these I always wonder what the people that found them are thinking. I mean, what type of person would you have to be to decide to try and screw over the restaurant industry (which already has historically low margins) just to make a buck? I can't even imagine how many fake reservations they would need to create to make that idea worthwhile for them. And what investors would give them money to do…

Right now they are taking all of the money for themselves, but in the future, if the service becomes popular, you will likely see them work directly with restaurants and share the revenue. The whole point of this service is to make reservations into something that can be bought. This obviously works best with the cooperation of the restaurants.

> "you will likely see them work directly with restaurants and share the revenue"

Why wait for the future?

If some startup thinks that selling reservations at restaurant X is profitable, they should be partnering with restaurant X right now to sell their reservations. They should be sharing in the potential downside with the restaurant -- if they book reservations they don't sell, and the restaurant has to turn down paying customers, the startup should pay some cost for that.

Re: Stop The JerkTech

#47

Post by fidotron »

wpietri wrote: post #39
fidotron wrote: post #18

Earlier quoted context omitted.

Right - what I get from the parking stuff is just how undervalued parking actually is, and just how poorly cities deal with it. The restaurant one is dodgy though. I could approve of a system where they've paid the restaurant in order to sell on a reservation (so the restaurant gets something even if there are no takers) but as it stands it's just a con.

Parking isn't undervalued. People just pay in time, not money. Better to say that it's inefficiently priced. Shoup's "The High Cost of Free Parking" is the bible on that: http://www.amazon.com/High-Cost-Parking-Updated-Edition/dp/1...

It's totally undervalued. Ask the average person if they think the price of parking is right and they'll probably claim it's outrageously high, when the existence and apparently enough-to-be visible success of this app prove the opposite is true.

Re: Stop The JerkTech

#48

Post by jblow »

rahimnathwani wrote: post #32
wpietri wrote: post #22

Earlier quoted context omitted.

Scalpers do not create value. At a concert the value is being created by the performers, and it's not like scalpers create seats or make the show longer. They just shift value around to people with more money.

Scalpers do create value. After a complete scalping transaction: - the original ticket purchaser is happier with the cash received than with the ticket they had before - the final ticket purchaser is happier with the ticket than with the cash they paid - the scalper is happy with his/her profit - the promoter's/venue's revenue is unaffected So, three people are better off. Value has been created.

No, because the final ticket purchaser would have been even happier with the ticket plus the extra cash he would have had if he had not needed to buy from the scalper, and/or the venue or promoter would have been happier with the extra money that is instead taken by the scalper.

Come on, this is obvious.

Re: Stop The JerkTech

#49

Post by onewaystreet »

lotharbot wrote: post #46
onewaystreet wrote: post #38

Earlier quoted context omitted.

Right now they are taking all of the money for themselves, but in the future, if the service becomes popular, you will likely see them work directly with restaurants and share the revenue. The whole point of this service is to make reservations into something that can be bought. This obviously works best with the cooperation of the restaurants.

> "you will likely see them work directly with restaurants and share the revenue" Why wait for the future? If some startup thinks that selling reservations at restaurant X is profitable, they should be partnering with restaurant X right now to sell their reservations. They should be sharing in the potential downside with the restaurant -- if they book reservations they don't sell, and the restaurant has to turn down…

Because it's very hard to get small businesses, especially restaurants, to signup for unproven new services. This is why you had companies like Groupon spending millions on hiring local sales people.

Re: Stop The JerkTech

#50

Post by saurik »

benatkin wrote: post #44
bunkat wrote: post #5

Whenever I hear about these I always wonder what the people that found them are thinking. I mean, what type of person would you have to be to decide to try and screw over the restaurant industry (which already has historically low margins) just to make a buck? I can't even imagine how many fake reservations they would need to create to make that idea worthwhile for them. And what investors would give them money to do…

The restaurant probably gets about the same amount of money on average, if not slightly more. It's easy to say that the jerk that uses this kind of app leaves less of a tip or takes up table space longer without spending more but on closer examination I don't see why this would be the case. They likely just pay more overall, and the app gets the extra.

You missed the part where these reservations are being held with risk of not succeeding in selling the spots: it isn't that the person who is sitting at the table is less profitable for the restaurant, but that a bunch of reservations are made that might in the end not ever succeed in being sold by the website. Assume for a second that the restaurant also charged for reservations and had cancellation fees for no-shows (which arguably they should, but the economics and expectations works out that most normal customers would be turned off by this): then the risk of the no-show transfers from the restaurant to this website, and it is more clear why this business is just a parasite.
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