Thank you for your inquiry and apologize for any difficulties you are experiencing with your can. It sounds like you need a new hinge pin. We have changed the material of the hinge pin from plastic to metal to prevent future breakage. We will be glad to send you that part free of charge. Please allow 5-7 business days for the delivery of your replacement hinge pin. Your order will be shipped via USPS to the address you provided on the online form. You will also receive a confirmation email when your order has been processed and shipped.

At simplehuman, we stand behind our products 100% and are working to offer the best possible service. We hope that our products can continue to serve you well for the years ahead.

Is this for real? Yes it is, and it made me happy enough to take the time and write a blog post about it. Several things about this experience are interesting to me. For one, this is an incredibly cheap way for them to make their customers happy. The replacement part probably costs less than $5 to produce, and the postage to ship it to me was under $2. There are obviously other costs associated, but overall it is very cheap. This great service directly affected the opinions of only 1 person (myself) — however, I would argue that given the increasing reach and ease of adoption of social media tools (Twitter, etc.), customer service (both poor and great) can have dramatic effects on a large set of potential customers. It’s no secret that people like to complain about customer service when it is horrible — we’ve all heard our friend’s stories of 2-hour support calls, or being transferred to 8 different people in 6 different countries while just trying to get a simple question answered. But I believe it is so easy now to contribute content socially via Twitter and other tools, that consumers will actually be willing to rave about good customer service as well — and this will impact the purchasing behaviors of others.

Knowing this, some companies will be able to use top-notch customer service to their advantage and as a viable advertising alternative to flashy, expensive ads through normal media streams (my guess is that SimpleHuman doesn’t have a huge advertising budget). After only being on Twitter for a few weeks, I’ve seen my fair share of Tweets in the form of ‘Wow, X company is great because they did Y’ , or ‘Excited for my morning cup of coffee at Z, I love that place!’ — I think these types of social micro-advertisements generated by consumers will start to carry more weight, particularly as social media goes mainstream.

On the other hand, there are plenty of negative micro-rants out there (e.g. ‘<Insert Company Here> sucks because <Insert Reason>’ is a good template) — and companies will have to find a way to mitigate the risks of these attacks destroying their reputations. Some companies have already figured this out…

There are many companies on Twitter who actively respond to customer complaints and recommendations. In this BusinessWeek article, some companies noted as being on Twitter include Dell, GM, JetBlue, and Whole Foods.  There are also several documented examples of consumers receiving almost immediate customer service after posting negative comments on Twitter (one person notes being contacted immediately by a Customer Service representative after posting a comment about a software problem).  I did a quick search on Google and found many other intriguing avenues for consumers to get customer service in a relatively effortless and ’social’ way. One of the more interesting sites I came across was GetSatisfaction.com , a site that aims to remove the boundaries between people and companies to form a mutually beneficial relationship without the typical customer-service hula-hoops (’press 1 for help with your <X>)

This brings me to the three main points I want to make:

• Consumer-driven micro-advertising in social media is real – If you are a company and you haven’t started managing your online reputation in social media yet, do it now…before it’s too late. Twitter is hitting its Tipping Point – I challenge you to search Twitter for any major company name – Tweets will show up! (to test this theory, I just searched for CarMax, first entry I saw:  “bluedogexpress: Carmax offered way below KBB.com fair price.”  — See what I mean? You can use this media avenue to your advantage — or if you ignore it, it can explode in your face.
  
• Opportunities exist to help big companies deal with social media, and they will be profitable - This is new stuff, and it’s only going to get bigger. Companies will need help in getting this right, as managing online reputation can be a delicate challenge — I see ‘Social Media Consultant’ as a potentially popular and profitable job title in the next few years — so study up.
  
• You have the power to make companies better – When you call a company and complain, they don’t have a big incentive to respond. When you (constructively) criticize companies through social media outlets, and thousands of other people see it – companies have a huge incentive to respond. Use this to your advantage.

So whether you own a company, work in advertising / marketing, or are simply a consumer of goods — the game is changing all around. How will you use it to your advantage?

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• Users can bid on items, but they don’t bid by specifying a price…they use a ‘bid’ that they have purchased
• ‘Bids’ can be purchased for 75 cents each
• Each time a user ‘bids’, two things happen: 1. The final cost of the item to the winning bidder is increased by a fixed amount (e.g. 15 cents) 2. The auction end time gets extended by a fixed amount of time (e.g. 20 seconds)
• The last person to ‘bid’ on an item before the auction expires is the winner, and must pay the total price of the item (e.g. the total number of bids multiplied by the fixed price amount increase noted above).

This is a little complicated, but here’s an example. Lets say that I purchased 100 ‘bids’ for a total cost of $75 dollars. The Mac Book Pro auction that I am checking out has a current price of $100 and a current time left of 10 seconds. I decide to use one of my bids on the item, and now I am the ‘current winner’. Because of my bid, the price of the MBP has increased to $100 + $0.15 = $100.15, and the auction now is over in 10+20 = 30 seconds…of course, other people are going to ‘bid’ against me, but lets say I spend a few hours checking the auction, and use all my bids….and I am somehow, beyond my wildest imagination, the last bidder. I have won the auction! Now, if the final price of the computer is $300, and I have spent $75 on the 100 bids, then I have bought a MBP for $375. Sweet! So Swoopo must not be making too much money right??? Wrong. They have made money…a lot of money — In fact, on this auction for a Mac Book Pro, I calculate that they have made almost 20 thousand dollars…

If you do the math on the above MBP auction….

• There have been 25,529 bids. This auction is a ‘penny auction’ meaning that each bid only increases the final cost of the item by a penny, so $255.29 indicates 25,529 bids. At 75 cents a pop, this is $19,146.75
• The final cost for the winner is $255.29
• Adding the two costs above, we are very close to a total profit of 20 thousand dollars!!!

But what’s that you say? The cost is spread across so many users that it doesn’t matter to any individual? One would hope so, but look at the poor winner of the auction. He has bid a total of 2872 times!! At 75 cents a pop, this is already over 2 grand for something that costs $1299 retail. To add insult to injury, he still has to shell out the $255.29 to purchase the computer.

So how does this business model work? How are people this stupid? And why didn’t I come up with this? Well, I can’t answer the last question, but I will try to answer the first two:

Although the business model may be new, the concept behind it is not. In fact, it is a published economic game / theory known as Dollar Auction. It exploits flaws in the calculations of expected value for a given game. At a high level, this model seems to work because

• It exploits a human irrationality where individuals think they will be the one who bids last – Everyone thinks they’re lucky once in a while…but really…do you think there aren’t 100s of other people out there thinking that they’ll bid last too? Thinking it to be true will not make it true…but it will make Swoopo a lot of money
• It exploits the sunk cost fallacy - If I keep bidding on an item, I will become tied to that item, thinking that since I have spent money by bidding so many times on the item, I must win it at all costs…even if economically it isn’t the right think to do (e.g. guy who won the Mac Book Pro Auction)
• It isn’t transparent – To an average Joe, it isn’t obvious what is going on. On EBay it is easy to see how much you will pay for the item, and understand how much the seller is making. On Swoopo, it isn’t transparent…and people will keep the bidding coming.
• It is like gambling – Why do people go to the casino? Obviously, not to make money — unless they’re kidding themselves or are playing Poker. People probably get the same rush from this site as they may get from putting it all on Red. There’s a chance to win at a small cost, many times over.

Anyway, that’s all I got on this site…what do you guys think? Should this be legal? Is it gambling? Are there any other sites out there that have wacky business models? I want to know about them!…I can’t say that I’m not jealous – the idea is simple and profitable – what else can you ask for?

I know what I am going to do next – search google for ‘economics irrational behavior’, and try to develop a business model around the results. Or maybe I’ll go back and re-read Nudge or Predictably Irrational , and see how to profit from human economical irrational decisions… is this an awful thought? Or is this just business as usual?

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Over the last 5 years since I began working full-time, I have developed a strong interest in investing in the stock market. I started investing in mutual funds, and gradually started investing in individual stocks. I even helped to form a (now defunct) Investment Club in order to learn more about investing in stocks with other young professionals who shared the same interest. What drew me to investing was the same things that drew me to playing Poker – in investing, you can use your analytical thinking skills, math prowess, and intuition to have an advantage over the competition, and make a lot of money….and in hindsight, it is ridiculous that a part of me actually thought it was as easy as that.

As I started to have more income available for investing, I started steering away from mutual funds, and started loading up on individual stocks. At one point, I owned ~15-20 different individual stocks. In hindsight, this is too many stocks for me to properly follow on a weekly basis – I didn’t have enough time to perform the necessary research into the stocks to understand if I should buy, sell or hold them. Even if I did have enough time, I didn’t have the proper knowledge to understand if I should buy, sell, or hold them— this was not investing, this was speculating.

I saw a lot of my picks do fairly well, and so I continued to pick new ones. My sense of performance was most definitely skewed though, as I never took the time to reasonably evaluate my performance against the industry benchmarks or indexes – all I saw was the positive gains, and that was good enough for me to ‘think’ that my picks were paying off. Then, you know what happened next…

Slowly and steadily, I saw a lot of my gains erode….some seemingly much faster than the market index. Then in 2008, I saw my gains erode quite quickly. Two of my picks were down more than 95%!!! So what did this cause me to do? Did I immediately re-evaluate my holdings, and try to understand where I went wrong? Did I admit to myself that some of my picks were bad, and then go out to try to find the real values in this market using fundamental analysis rather than speculation? No, what I did was absolutely nothing! I was like a deer caught in headlights – I found myself wanting to simply ignore the situation entirely, and let the stock market run its course on my hobby of speculation. When talking to some of my friends, they have had the exact same reaction to the markets lately…it’s better just not to look.

I regularly follow PFBlog, a personal finance blog whose author has a goal of hitting a million before 36. He had regular, very interesting posts…until about the middle of 2008, and then all the posts abruptly stopped. It seemed that he was having the same sort of ‘deer caught in headlights’ behavior that I was having – his holdings were heavily weighted towards financial stocks, so he probably took a large hit. He recently started posting again, and one of his recent posts really struck a chord for me. In the post, he reveals the lessons he learned from his individual stock picking:

“In retrospect, the biggest lesson I learned from loading more and more financial stocks between 2007 and 2008 is: I acted blindly. With 60-hour work weeks, I should have known that I cannot dedicate enough time to study each company and keep track of all developments.”

He publicly admitted his mistakes, and made a plan for his investments to get back on the right track – He sold all of his individual stocks except Berkshire Hathaway, and plans to invest in mutual funds using an automatic investment plan.

I am using this blog post to do the same thing that he did — Admit my investing mistakes, and make a plan to change them — My basic plans are similar to the author of PFBlog. They are:

Invest in mutual / index funds using an automatic investment plan – My wife and I have made a big push to automate most of our other finances (bills, savings account, etc.) We plan to automate our investing in the same way.

Simplify mutual fund / index fund holdings – It is important to follow your mutual fund holdings on a regular basis. Maybe not with the same rigor as your stock holdings, but you need to know when one of the apples in your basket turns bad…and if you have a lot of apples, one could stick around with bruises for a long time. We had a bunch of mutual funds (15-20), and we have started to scale this down to a few index funds and between 5-10 mutual funds – this will keep things a lot simpler.

Hold only 2-5 individual stocks at any time, and do the due diligence in researching them – This was my biggest problem. Why did I own so many individual stocks? There were a lot of factors, but I am committing to owning only a few going forward. As far as ‘due diligence’ research — I have a lot to learn, and I can’t tell you exactly what ‘due diligence’ research means, but I can surely tell you what it does not mean — It means not speculating like I was doing previously. As far as learning about the necessary research, there are several books on my bookshelf that I have read and have found to be valuable in growing my ability to evaluate stocks. The books are:

• The Warren Buffet Way – Robert G. Hagstrom
• One up on Wall Street – Peter Lynch
• Common Stocks and Uncommon Profits – Phillip A. Fisher
• You can be a Stock Market Genius – Joel Greenblat

Do you have additional recommendations for good investing books?

So that’s it, my personal finance confessions and my resolutions to fix them all in one blog post. One thing I can certainly say is that I find myself fortunate to experience this type of financial crisis this early in my investing career. Every generation will go through them, some more than one, some more severe than others, but it will surely happen to everyone. Having it happen at an early age has allowed me to start learning the tough financial lessons
without suffering a huge amount of losses — this will surely help me make more prudent financial decisions in the future.

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I’ve actually been thinking about this a lot lately. Here is my response. I think these two traits are invaluable in the workplace:

Curiosity is a ‘must have’ trait if you are going to be a top performer. Curiosity is also closely tied to passion – You can definitely tell which of your co-workers are passionate about what they do — and it’s the most passionate people who make you want to do your job better.

Customer-focused – When it comes to focusing on the customer, it’s all about prioritization. There’s not a single person in the corporate world who will tell you that there is too little work that needs to be done — and sometimes not all of it can be. Out of all the possible tasks, you need to pick the heavy hitters, and you need to nail them — to pick the heavy hitters, you need to know your customer and what they want. Sometimes it’s as easy as asking them what’s most important to them. Often times, everything seems like the top priority, or the prioritization is coming from multiple sources — this is when things get complicated — but it’s worth the up-front extra effort to figure out the actual prioritization — accomplishing the most important tasks for your business will look better for you and your team in the long run.