Category: Web/Tech Page 6 of 8

Scam of the Month – Judge Judy Punishes an Idiotic eBay Fraudster!

On May 27, 2007

In buySAFE, Counterfeits, eBay, eCommerce, Online Fraud, Portable Trust & Reputation Signals, Surety Bonds, Trust and Safety, Web/Tech

In this "scam of the month", Judge Judy takes on an eBay fraudster and ultimately hands out the maximum punishment. In spite of the fact that this scam seems audaciously ridiculous, it is actually quite common online. Bottom-line, there are a lot of folks out there that lack any semblance of a moral compass.

My inspiration for starting buySAFE was a similar scam that I fell victim to on eBay during the summer of 2000. The only major differences that I can point to are that I purchased a $400 PDA, and instead of taking the scammer to court with Judge Judy, I decided to instead start a company dedicated to making every online transaction trusted, reliable and risk-free… buySAFE!

Next time, I hope these two innocent victims limit their purchases to buySAFE merchants. It will save them a whole lot of anguish and effort!

Watch this video. It is quite enlightening.

Related articles:
"Judge Judy Episode on eBay Trust & Safety" on Psychohistory blog

The Wharton School and Entrepreneurship

By golf

On May 23, 2007

In buySAFE, eCommerce, Entrepreneurship, Steve Woda, Venture Capital, Web/Tech, Wharton

The Wharton Business Plan Competition took place earlier this month, and NP Solutions was the big winner for 2007. The new venture took home the $20,000 grand prize for a business that provides a polymer based injectable hydrogel treatment for back pain. Obviously, I wish these folks a bunch of luck with their new business.

As you may already know, I am a big fan of these collegiate competitions. buySAFE (formerly known as BondMyAuction) is a product of the Wharton Business Plan Competition, and so I can speak from experience when I say that these events can be very useful in getting entrepreneurial ventures launched. I actually entered the business plan competition in 2000 and 2001 with different ventures as a student.

Then after graduation, I teamed up with Peter Niessen, a 2002 MBA grad, to enter BondMyAuction in the 2002 Wharton Business Plan Competition (You need at least one current student on your team to participate, but the rest of the team can be alums, etc…). Peter was a terrific teammate, and he and I were able to make it to the Finals of the competition. Again, it was a great experience, and you can read about it in this recent article by the New York Times – "Beyond Grades: Business Students Put Their Start-Up Ideas to the Test"

One last interesting note for you…

Jeff Grass, buySAFE’s CEO, was also a finalist in the Wharton Business Plan competition in 1999 along with his business partner, John Tedesco (John is currently the CEO & President of Guardian Mobile Monitoring Systems). Jeff and John launched PayMyBills.com shortly after graduation, and they ultimately sold the company to PayTrust in 2000. Today, the company’s service is owned by Intuit, and it powers the bill payment and management solutions for some of the country’s largest financial institutions.

Needless to say, collegiate business plan competitions can provide aspiring entrepreneurs with a generous leg up on the formidable challenges of starting up a company out of school. For me, the Wharton Business Plan Competition experience was invaluable.

The Three Qualities of Great Entrepreneurs

By golf

On May 19, 2007

In Steve Woda, Venture Capital, Web/Tech

Entrepreneurship is one of the most exciting things that you can choose to do as a profession. It is also tough to be an entrepreneur. Entrepreneurship is definitely not for the faint of heart. I ran across this quote recently, and I thought it perfectly describes the attributes of successful entrepreneurs.

"Top people, especially entrepreneurs, seem to have these three qualities: First, they learn more things. Second, they try more things. Third, they persist longer than anyone else."

I can’t source this quote unfortunately because I did not write it down at the time I originally heard it. However, I did find it mentioned on the NVTC website with a quick Google search. The quote is right on point. I could not have said it better myself.

Great entrepreneurs are extremely curious people. They are constantly seeking to learn about new stuff. That is how they innovate and develop new ideas. That is also how they successfully manage their ventures.

Great entrepreneurs know that although the goal is always success, failure is to be expected as well. If you try twice as many things as your competitors, you are twice as likely to hit on the right formula. This requires creativity, speed and action. It also requires a confidence to weather those pesky failures. Again, great entrepreneurs continue working the problem until they find a solution.

Most of all, great entrepreneurs never quit. They keep at it much longer than most folks. They fail, but they get right back up and try again. In my opinion, persistence is by far and away the most important quality that great entrepreneurs possess.

These also happen to be the qualities that I most admire in the folks that I hire to work in my organizations. In start-up ventures, entrepreneurship cannot solely be the role of the founders. Every employee needs to be entrepreneurial. In my opinion, I would take an entrepreneurial employee over others almost any day.

The entrepreneurs thrive in startups. They plow new ground, and take ventures to a place they could not have been imagined before. The "big" resume folks typically do the same things that worked in their last organization. Unfortunately for them, most great startup ventures are doing something completely new. That requires entrepreneurship.

You show me a team of talented entrepreneurs working well together as a team, and you will probably also be showing me an organization that has a great chance at success.

While I am on the subject, let me also recommend a book for you to read that illustrates my last point. "Entrepreneurial Marketing: Lessons From Wharton’s Pioneering MBA Course" by Len Lodish, Wharton professor and marketing guru, is one of my favorite books. For marketers, I believe Entrepreneurial Marketing is required reading. The following article will give you a brief overview of the book as well as an introduction to Len and his philosophies on teaching marketing to the MBA students at Wharton: Cheaper-Better-Faster.

Enjoy and have a great weekend!

Important eCommerce Trust and Safety Statistics

By golf

On May 8, 2007

In buySAFE, Counterfeits, eCommerce, Economics, Online Fraud, Portable Trust & Reputation Signals, Trust and Safety, Web/Tech

At the PESA Summit this past week, there was a lot of talk about how to improve e-commerce conversion rates. I believe there are three critical drivers for conversion: product selection, price, and trust. Each of these issues would provide substantial content for an article, but I thought I would dedicate today’s post to a number of very important trust-related statistics.

If you have any doubt about the role of trust and buyer confidence in your e-commerce business success, please take a quick look at these stats.

55% of online shoppers say trustworthiness of the merchant is most important (vs. price, convenience, pleasure, other)
(Source: Online Shopper Research Report, 959 respondents, August 2006)

65% of online shoppers buy only from sites they know and trust
(Source: VeriSign Secured Seal Research Review 08/06)

72% of online shoppers are becoming more cautious when buying online
(Source: Gartner Research, 5000 respondents, May 2005 survey)

73% of online shoppers are concerned about the item being misrepresented (inaccurately described, counterfeit)
(Source: Online Shopper Research Report, 959 respondents, 08/06)

76% of online shoppers are worried about never getting their purchase
(Source: Online Shopper Research Report, 959 respondents, 08/06)

81% of online shoppers are concerned about merchant return/refund policies not being honored
(Source: Online Shopper Research Report, 959 respondents, 08/06)

84% of online shoppers are concerned about merchants not treating them fairly
(Source: Online Shopper Research Report, 959 respondents, 08/06)

85% of online shoppers are concerned about identity theft
(Source: TNS Research, 08/06)

And, amazingly, over 50% of all U.S. internet users still don’t buy online (even from Amazon.com!).
(Source: Bear Stearns, September 2006)

With respect to this last statistic, "trust" issues are the primary
driver of e-commerce non-participation. Amazingly, more than 50% of
your potential customers will not buy online because they are nervous!
Are you kidding me? That is a huge number, and obviously, the time has
come for the e-commerce industry to take this issue seriously.

eCommerce’s “Shoot the Messenger” Strategy

By golf

On April 20, 2007

In ChannelAdvisor, Counterfeits, eBay, eCommerce, Online Fraud, PayPal, Trust and Safety, Web/Tech

When it comes to online fraud, the e-commerce industry seems to hate looking itself in the mirror. Specifically, e-commerce executives cringe at the mere mention of the existence of online fraud. Their first reaction is almost always to blame the messenger for sharing tough information about the industry rather than actually tackling the core issues driving the online fraud that victimizes consumers for millions of dollars every day.

I ran across the following quote from Scot Wingo of ChannelAdvisor in this blog post regarding eBay’s VP of Trust & Safety appearance on the Oprah Winfrey Show:

"Unfortunately it’s never a positive when there’s someone with Oprah’s reach out there associating eBay+fraud so I think it was a net negative."

I have learned from experience that Scot Wingo is a very smart guy, and he has proven to be a vocal educator regarding the e-commerce industry. When necessary, he has also had the courage to stand up and point out what isn’t working in the e-commerce industry. My interpretation of Wingo’s comment is that Chestnut’s appearance wasn’t a good thing for eBay’s short-term prospects or stock price. I would agree with that. However, I do not believe Wingo was suggesting that coverage and discussion of online fraud problems are a bad thing for eBay or e-commerce in the long-run. If that was his suggestion, I would disagree with that.

Scot’s comment did make me think about an alternative point of view that I have heard many times from e-commerce executives over the years. I often the hear the following question from execs almost verbatim:

"Don’t you think that by talking about online fraud you are blowing the issue up way beyond proportion and scaring consumers away from e-commerce?"

When I hear that question, I cringe because it displays a fundamental lack of wisdom. Wake up everybody!

Today, more than 50% of all online surfers don’t buy ANY merchandise online! That is a ridiculously high number, and when surveyed, these non-buyer internet surfers overwhelmingly cite distrust of and nervousness about e-commerce transactions. Is that because the industry talks about the online fraud problem too much? No! It is because online fraud is, in fact, a huge problem as reported by many sources including the Federal Trade Commission. Almost everybody knows somebody that has been burned on the internet. Don’t you? The 50% of internet surfers that avoid eCommerce do so because, to date, the industry hasn’t solved the problem for consumers.

The industry consistently takes half-steps so that it can tell the press and consumers that "we are doing something". My honest opinion is that it is a bit of joke (You will want to tune in tomorrow for a very specific example that will probably shock you.), and any smart e-commerce executive knows that is true.

Buyer protection plans and merchant rating systems are simply not enough. If, for example, eBay’s Feedback Rating system and PayPal’s Buyer Protection were enough to make it completely safe for consumers, why does Chestnut have to go on Oprah and explain the issue? Well, of course, he wouldn’t.

If a crime happens in your neighborhood, most people want to know about it immediately so that they can take specific steps to protect themselves in the future. It is no different in your online neighborhood. Ignoring the problem of online fraud and shooting any messenger that points out that a problem exists is not going to help solve the problem.

In the long-run, Oprah’s coverage of online fraud is a very good thing for eBay, e-commerce, online merchants and consumers! Let me say that again… Disclosure, coverage, and discussion of the online fraud problem will help and inspire the industry to identify solutions that will be critical to the success of this industry in the long run.

The minute an effective, comprehensive solution to online frauds is adopted, consumers will buy merchandise on the internet like never before. The minute we stop blowing smoke and we start solving the problem will be the minute e-commerce starts to tap into the ~100 million internet surfers who we can’t currently count as customers.

Consumers want us to make it completely safe for them to buy online. We owe it to folks to do just that. Don’t shoot the messenger! Understand the problem. Discuss and debate it. Then solve it!

Proposed solution to e-commerce-related fraud:
A trusted, objective, regulated third party needs to investigate the backgrounds, history and financial stability of online merchants and then, if the third party is willing to endorse the merchant, the trust & safety company needs to put its money where its mouth is by fully protecting consumers for any deviation from the promised terms of sale. Obviously, that is what buySAFE does.

Where Can You Meet the Largest Merchants on eBay?

By golf

On April 18, 2007

In buySAFE, eBay, eCommerce, Infopia, MIVA, Steve Woda, Web/Tech

Every couple of months, the Professional eBay Sellers Alliance (PESA) pulls together a collection of eBay’s largest, most successful merchants. These events are always terrific opportunities to meet experienced e-commerce professionals, and to get an insider’s view of how the e-commerce market is developing. Next week, PESA will convene its sixth PESA Summit in Chicago.

buySAFE has attended every one of these remarkable semi-annual events. In fact, we have sponsored every PESA event since the organization’s inception, so we are obviously a huge supporter of this organization.

Therefore, I wanted to give next week’s PESA Summit a mini-plug. If you are a professional merchant or simply interested in e-commerce because you are a member of the media, a financial analyst or a third-party service provider, you should attend this event. You won’t be sorry. You will meet amazing folks and get the inside scoop on where e-commerce and eBay are headed. Christie Hefner of Playboy Enterprises will be giving the Keynote Address.

As a side note, I will be speaking at the PESA Summit on an interesting panel of e-commerce experts including Jonathan Gariss (CEO for GothamCityOnline), Sloan Gaon (VP of Global Strategy for MIVA), and Jimmy Duvall (Director of e-Commerce Products for Yahoo! Small Business). The Website Design & Web 2.0 panel should be very interesting, and I will provide a summary of the discussion on this blog after the event.

I am looking forward to it, and I hope you can find your way to Chicago for this terrific event.

Does eBay Have a Credibility Gap With Merchants in 2007?

By golf

On April 17, 2007

In eBay, eCommerce, Web/Tech

As 2007 begins to come into focus, I thought it might be interesting to revisit an experienced PowerSeller’s perspective on eBay. Frank Ross writes the Common Sense eCommerce blog, and in November 2006, Frank provided his commentary on eBay’s evolving relationship with e-commerce merchants. Please give his blog post a quick review – "eBay Credibility Gap 2007".

Obviously, 2006 was a tough year for eBay and its merchants. We regularly get emails on this subject from readers of this blog as well e-commerce merchants that work with buySAFE, and I don’t believe 2007 is turning out to be much better. However, I would love to hear from our readers.

If you are an e-commerce merchant, we would love to hear from you on this subject. Please leave a comment on this post if you have thoughts on eBay and its evolving relationship with e-commerce merchants.

Technorati Tags: eBay, eCommerce, Economics

Antitrust Lawsuit Filed against eBay over PayPal, Payments Policies

By golf

On April 12, 2007

In eBay, PayPal, Web/Tech

AuctionBytes’ Ina Steiner reported this week that an anti-trust lawsuit was recently filed against eBay.

‘Michael Malone filed an antitrust class-action lawsuit against eBay this week under the Sherman Act, alleging eBay "utilizes its nationwide monopoly of the on-line auction market to monopolize the available forms of payment that sellers can use on eBay." eBay controls which payment methods sellers may advertise in their listings, and this year, it eliminated buyer-protection for non-PayPal transactions. eBay owns the PayPal payment service.’

The article also references the old conflict between PayPal and eBay. Before eBay purchased PayPal, PayPal’s management team prepared an anti-trust lawsuit against eBay and threatened to pursue the action. Ultimately, PayPal did not file the anti-trust lawsuit, but it is ironic given the current lawsuit’s claims.

Very interesting stuff. We will have to keep an eye on how this develops.

buySAFE on The Today Show!

By golf

On April 4, 2007

In buySAFE, Counterfeits, eBay, eCommerce, Google, Online Fraud, Portable Trust & Reputation Signals, Surety Bonds, Trust and Safety, Web/Tech

The past few days have been quite exciting here at buySAFE. Last week, buySAFE was featured on The Today Show. The "Designer Duds: Fake or Real?" segment, reported by Today’s consumer affairs reporter Janice Lieberman, discussed the growing e-commerce problem of counterfeit luxury goods. As expected, buySAFE was showcased as a terrific solution to the counterfeit goods problem.

[youtube http://www.youtube.com/watch?v=r3lCsN3YzJs]

Counterfeit/fake/stolen goods are obviously becoming a major issue for e-commerce, but in my opinion, this problem is actually a symptom of a much larger, more important, fundamental problem… Online, buyers have a very difficult time discriminating good sellers/product from bad sellers/product. The REAL problem is that the Web suffers from major information asymmetry issues. That is why bad guys are successful at defrauding consumers.

Please think about my diagnosis for a moment… If consumers could tell the difference from the good guys and the bad guys, would shoppers ever unknowingly buy a counterfeit item? Of course not! Fraud happens because of information asymmetry.

I think you will find the "Designer Duds: Fake or Real?" news segment very interesting. However, as you watch this clip, please understand that the counterfeit/fake/stolen goods fraud problem is due to a more fundamental e-commerce problem… Buyers can’t reliably tell the difference between the good guys and the bad guys! In economic terms, this is called information asymmetry, and it is causing legitimate, professional merchants millions of dollars each and every day.

Kudos to Jeff Grass, buySAFE’s CEO, for a job well done!

Related blog posts and e-commerce articles:
"Designer Duds: Fake or Real?" by Janice Lieberman on The Today Show and iVillage.com
"buySAFE Invited By the French Government to Help Stop Online Sales of Counterfeit Luxury Goods" by Travis Brown on the buySAFE blog
"eBay Bonding Service buySAFE Featured on Today Show" by Ina Steiner on AuctionBytes.com
"buySAFE Appearance on 3/20/2007 Today Show" on AuctionBytes.tv

Stop Worrying! How to Solve the eCommerce Trust Problem.

By golf

On March 24, 2007

In buySAFE, eCommerce, Economics, Online Fraud, Portable Trust & Reputation Signals, Surety Bonds, Trust and Safety, Web/Tech

Jeff Grass, buySAFE’s CEO, recently posted a comprehensive article on the eCommerce Trust problem, and how buySAFE is specifically designed to tackle this big issue. Jeff does a great job of laying out the requirements for effective online trust and safety solutions, and I thought you might enjoy the read.

"Stop Worrying! How to Solve the eCommerce Trust Problem. (A must read if you sell or buy online!)" by Jeff Grass on buySAFE’s blog

If you have any thoughts, insights, or comments on Jeff’s article, I would be very interested in hearing from you.