Paul Wallbank – Brilliant Communications

Category: advice

Too good to be true
As regular as the Olympic Games are, so too are the ticket scams. Every four years we see a ‘scandal’ of vendors, these days online, offering cheap or difficult to get tickets. This year’s London Olympics are no different.

The bait used by these scammers is the almost impossible to get tickets, the frenzy to get along to the opening ceremony or top days sucks dozens, sometimes hundreds, of enthusiastic punters into losing money.

It’s not just Olympic tickets, with the ease of setting up websites scammers can be online quickly with a credible, professional looking site and new services, like group buying and ‘penny auctions’ also offer great opportunities for the enthusiastic spammer.

While it’s sometimes difficult to spot the scams, there are some signs that can reduce the risk of your being caught out.

Check the site

How long has the domain been registered? You can quickly check the details by running a whois search, a kind of online registration check.

For .com sites, the authoritative Whois site is Network Solutions while for .co.uk sites (a likely candidate for London Olympic ticketing sites) it is Nominet. Each country has its own registration list and in Australia, for .com.au it is AuDA who run the My Web Name site.

A recently registered, or long standing, name doesn’t in itself indicate whether a site is a scam or not, but it is a good start.

What are the contact details?

A reputable site that wants your money should have a phone number and street address. A site that doesn’t have these is a warning sign.

Do a web search

The web is your friend. Use your favourite search engine to search the business’ name, for most people this is Google. This can show if there’s been complaints about the site.

Make sure you do a full name search, for instance if you are searching for Joe’s cutprice tickets put the name inside inverted commas such as “Joe’s cutprice tickets”.

Also do a search on the business address, if a company operates from the same location as dozens of others then it’s almost certainly operating from a service office.

While there’s nothing wrong with a business operating from a serviced office, if a company is claiming to be a large reputable multinational then it’s probably telling porkies.

Use a disposable password

If the site asks you to create an account or a password, use something different to your regular banking or other important passwords.

Some of these scammers are actually harvesting login details for online scams so don’t use the same password as your email or social media account as you may find your account hijacked.

Don’t use social media logins

Account hijacking is becoming prevalent on social media sites. The scammers get access to a victim’s Facebook or Twitter account and then contact all the victim’s friends posing as the victim. This is particularly effective for getting more people trapped in the scam.

Increasingly we’re seeing sites using social media logins, that is offering to use your Facebook account rather than a user name or password as a convenient way of signing up. These almost always give the site permission to post on your behalf and you should not do this unless you are totally confident in the site.

Pay by credit card

Even the best of us can get caught out by scammers, so paying by credit card means you have some protection from dodgy deals as you can dispute and reverse the transaction.

Note the words credit card, if you use a debit card many banks won’t give you the same consumer protections.

Avoid direct wire payments or online services like PayPal as you’ll probably do your cash or, at best, be bogged down in the dispute procedure.

Use common sense

The most important part of avoiding scams is common sense; if something is too good to be true then it almost certainly isn’t true.

An offer for hard to get Olympic tickets, fifty dollar iPads or a million dollars from a long lost cousin in Africa always come with a catch that leaves you out of pocket and possibly with your identity stolen.

Many of these scams aren’t new, they’ve just evolved to take advantage the online world.

During the golden era of the snake oil merchant in the 19th Century, the phrase there’s a sucker born every minute was coined. Don’t be that sucker.

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January 11, 2012
Distrusting the cloud
The recent KPMG Convergence Report looking at online trends in the mobile web found that nine out of ten Australian consumers are concerned about the security of their online data.

In light of recent corporate security breaches such as Sony’s and Telstra’s this is understandable which creates a real barrier for the adoption of cloud computing services.

For cloud computing to be taken seriously, customers have to be certain their data and applications will be respected and protected.

The corporate sector’s failure to hold senior management responsible these problems shows how big businesses largely aren’t taking user privacy or security seriously.

This is a great opportunity for new businesses, we’ve already seen Amazon become the biggest host for cloud services over storage and Internet incumbents who five years ago would have dismissed Jeff Bezo’s company as a glorified book stand.

For newer companies offering cloud services it’s a chance to build a culture where customer service, privacy and respect comes before management bonuses and perks. Where delivering what you promise is more than waving a vague Service Level Agreement (SLA) document under customer’s noses.

As customers, big and small businesses have much to gain from cloud computing‘s productivity, collaboration and cost saving aspects but trust that data will be protected and the service will be available is essential.

Before choosing a cloud service have a search of the web and popular forums to check what people are saying about the product.

Don’t rely on fancy marketing, or assume that a big company will be better at protecting your data. The evidence is clear that smaller, newer companies are doing a better job at protecting data and ensuring business continuity than many of their bigger competitors.

Over time, customers are going to get used to trusting cloud service providers and the businesses who’ll succeed in the online applications world are those who’ve been shown to be trustworthy.

This is one way the web is changing the way we do business.

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December 16, 2011
The digital inheritance
Our digital footprint – what appears about us online in websites and social media services – is becoming more important as we’re judged by what people find out about us on the web.

As what we store on the web becomes more important, the need to plan for what happens to that data when we pass away becomes more important. “Generation Cloud”, a survey in the UK by hosting company Rackspace and the University of London looked at how Britons were dealing with these issues.

Information left online can cause problems as social media sites will send suggestions and reminders which can distress others if the suggested contact has passed away.

Equally, a web site or Facebook page could even serve as a memorial. The final blog post of Derek K. Miller is a particularly touching memorial.

To create a “digital tombstone”, for your loved ones to remove inappropriate posts or just to access your digital personal effects like email or photos stored on a cloud service, they will need your passwords.

In the Generation Cloud survey, 11% of the participants planned to leave their online account details and passwords in their wills and half considered some of their ‘treasured possessions’ are stored online.

Once again we’re finding our online data has real value that’s worth passing down. It’s another reason to guard your data safely and not give it away lightly.

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October 18, 2011
Trusting online reviews
Review sites where customers can post their experiences are changing consumer behaviour and bringing a new level of accountability to businesses, but how do we trust the comments on which appear online?

Travel review site Tripadvisor is a good example of how consumers are able to spread the word about their good and bad business experiences, much to the displeasure of the UK hotel industry and its media friends. To make things worse, many of those reviews are further spread by social media services like Twitter and Facebook.

While the travel industry complains about fake reviews from competitors and disaffected customers, the majority of fake reviews are from hoteliers themselves pumping up their own business. It’s always interesting how many gushing reviews are from anonymous posters with only one or two reviews to their name.

Should any of the threatened court cases actually make it before a judge, there may be a few hoteliers finding themselves in an uncomfortable position, a classic case of being careful about what you wish for.

That’s not to say Tripadvisor doesn’t have a problem, the comments in a recent Telegraph story about the service show they have the web 2.0 problem of lousy customer support which comes from a low cost, user generated business model.

A more serious point which is overlooked by most of the critics is that Tripadvisor, like most travel sites, is linked to certain booking services. If you attempt to use the site to book a property that isn’t aligned with the site, it may well falsely report there are “no rooms available”, which is deceptive and will almost certainly fall foul of competition laws in most countries.

For users of sites, it means we have to be careful with what the reviews and the sites themselves tell us. So what should we watch for?

Spotting dodgy reviews

The obvious thing is the planted review. The easiest way to spot this is by the number of reviews submitted by the commenter.

If a commenter only has one or two reviews then it’s almost certain they either have an axe to grind or they have been submitted by the establishment or it’s staff as most rational people don’t have the energy or time to build a comprehensive profile of reviews just to shaft one place.

Another useful tactic is to look at the reviews around it, do others disagree with that reviewer or are they consistent? Outlier bad reviews can indicate a plant, a grudge or simply a bad day in the kitchen.

Dealing with bad reviews

As we’ve pointed out before, consistent bad reviews on these sites usually indicate a structural problem in the business however if you suspect a fake or planted review, most services have a “flag as inappropriate” option or a dispute mechanism.

Be careful using these however as flagging a legitimate complaint as malicious or fake may antagonise the poster and give the poor review more publicity than you would like.

The social aspects of the web, such as review sites and social media services like Twitter and Facebook, are going to become more important over the next few years as internet users use them to help sift through the massive amount of information on the net.

All businesses, whether in hospitality or other industries, need to take these sites and the reviews on them seriously.

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September 16, 2011
Greater fools and lesser fools
As Groupon struggles to get its public offering to the market and the startup mania continues in the tech sector, it’s worthwhile having a look at what underpins the modern Silicon Valley business model along with it’s limitations and risks for those who want to imitate it or invest in it.

Distilled to the basics, the aim of the venture capital funded startup is to earn a profitable exit for the founders and investors. While there’s some exceptions – Apple and Google being two of the most notable – most of these businesses are not intended to be profitable or even sustainable, they are intended to be dressed up and sold onto someone else.

This can be seen in what many of these companies spend investors’ money on; in an example where a startup receives 10 million dollars VC investment, we may see a million spent on developing the product, five million allocated customer acquisition and four million on PR. The numbers may vary, but the proportions indicate the investors’ and management priorities.

Focussing on PR and customer acquisition is essential to attract buyers, the public relations spend is to place stories in the business media and trade press about the hot new business and spending millions buying in customers backs the narrative of how great this business is. By creating enough hype about a fast growing enterprise, the plan is prospective buyers will come knocking.

But who buys many of these business? In some cases a company like Microsoft or Google may buy the startup just to get the talents of some smart developers or entrepreneurs, but in many cases it’s fools being parted from their money.

Greater Fools

The greater fool model the core tech start up model; two guys set up a business with some basic funding from their immediate circle; the friends, family and other fools. A VC gets involved, makes an investment and markets the company as described above.

With enough hype, the business comes to the attention of a big corporation whose managers are hypnotised by the growth story and possibly feel threatened by the new industry or have a Fear Of Missing Out on the new hot, sector.

Eventually the big business buys the little guys for a large sum, meeting the aim of the founders and venture capital investors. The buyer then steadily runs down the acquired business as management finds they don’t understand it and find it a small, irritating distraction from their main business activity.

While there are hundreds of examples of this in the tech sector, the funny thing is the biggest examples are in the media industry with Time Warner’s purchase of AOL and News Corporation of MySpace.

Lesser Fools

As a bubble develops we start seeing the Initial Public Offering arrive and this is where the lesser fools step in.

The mums and dad, the retiree, German dentists, the investment funds and all the other players of the stock market are offered a slice of the hot new business.

Usually the results are interesting; the IPO is often underpriced which sees a massive profit for the initial shareholders and underwriters in the first few days then a steady decline in the stock price as the pie in the sky valuations and the realities of the underlying business’ profitability become apparent.

Steve Blank, a Silicon Valley investor and entrepreneur, put the greater or lesser fool scenario well in a recent article asking Are You The Fool At The Table? Sadly too many small and big investors, along with big corporations, are the fools at the table ignoring Warren Buffet’s advice on avoiding businesses you don’t understand and finding themselves the patsies that the Silicon Valley startup model relies upon.

The fundamental misunderstanding of the venture capital driven Silicon Valley model of building businesses is dangerous as our governments and investment mangers are seduced by the glamorous, big money deals. It’s also understandable funding from banks and other traditional sources is difficult to find.

An obsession with this method of growing businesses means that long term ventures with profitable underlying products and services are overlooked as investors flock to the latest shiny startup. That’s a shame and something our economy, and investment portfolios, can’t really afford in volatile times.

For business owners, the venture capital model might be a good option if your aim is a quick, profitable sale to a fool. If your driving reasons for running a business are something different, then maybe the Silicon Valley way of doing business isn’t for you.

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August 17, 2011