How Paypal and Reddit faked their way to traction
medium.com
medium.com
I fail to see why the same scandal should not be seen here
Edit: Reddit is deception, hard to see fraud. Dating sites with fake profiles are likely to be fraud if its a pay site(AFF sounds outrageous). The odd ball is PayPal - if the eBay supplier got less money from the sale than if they had dealt with a normal user with a credit card the I guess there could be a case for fraud. Be interested in a real lawyers view
But if one company achieved success in the VoIP market over its competitors by dishonest, underhand or fraudulent means then they should be punished - enough to end the moral hazard.
This is why Über and the like are facing opposition from disinterested parties - because "disruption" of an industry by new technologies is a Schumpter style positive - but it is not a Cloak of Immunity for any particular company engaged in that disruption. We do not have a good track record in this - and that matters.
"The only negativity in recent years was due to a book called The PayPal Wars, written by a sycophantic jackass called Eric Jackson. This guy was one notch above an intern at PayPal in the first few years of the company, but gives the impression he was a key player and privy to all the high level discussions. Eric couldn't find a real publisher, so Peter funded Eric to self-publish the book. Since Eric worships Peter, the outcome was obvious - Peter sounds like Mel Gibson in Braveheart and my role is somewhere between negligible and a bad seed. However, to his credit, Peter didn't realize the book would be as bad as it was and apologized to me personally at a Room 9 board meeting at David Sacks's home in LA."
In the case of the restaurant, they're not making up fake customers to fill out the other empty seats. The people who are in there are genuine diners. Invoice numbering is completely arbitrary, but the preceding invoices before the start do not exist. With two-for-one vouchers, the businesses take a hit in the profits; they are giving up something to bring in that extra business.
But online businesses and services are astroturfing and no one calls them on it. They're not giving up something to create business. They're not "filling the window seats". They're committing fraud and they know it.
Most of those examples were not faking anything. Rentoid actually supplied a serivce, though it wasnt "user-generated". Reddit supplied links their potential users would be interested in.
This is a mixture of demonstrating how the service works, and supplying actual content to potential users.
By way of contrast, what the dating site admins should have actually done, is ask all their single friends to sign up (and any other single people they could get their hands on directly).
It seems a perfectly good and moral business strategy to generate your own content which is representative and useful. I think "faking it" is a bit more questionable.
Companies do that all the time.
In the case of the dating website it is faking. Because there's no way you'll end up dating the fake profile
Not sure how it was in the case of Paypal, if it was a false order or they would just go ahead and buy small stuff then.
But in the case of Reddit and Rentoid, it's not fake. You're getting what you want. Links and the products to rent.
It doesn't matter if it's being provided by the founders, you're getting the service
Users may have been surprised to find out just how few other people actually existed. But I see this as legit. It would be like a big corporation hiring "Esprit Legal Firm" for their defense, winning in court, and hen finding out that the company was run by a single lawyer. Obviously businesses can't lie, but you're not required to list your own flaws either.
That's not actually achieving anything. It's just more complicated term usage because you don't think the word can be used positively.
It's all semantics. I think the author was very clear and the whole concept made sense to me despite the use of the word "faking"...it didn't bother me at all.
And the Airbnb spam debacle was left out as well. (http://davegooden.com/2011/05/how-airbnb-became-a-billion-do...)
For the record, I use both services frequently, but those are notable omissions.
Really curious how much PayPal dumped into buying eBay items. Doesn't seem like something you could do for long, so I imagine it had to be highly targeted.
1. They had a bot that would put a PayPal badge onto all of a seller's listings for the seller.
2. They provided buyers with a small amount of PayPal credit for free when they signed up for an account, so that the buyers would ask if they could pay with PayPal.
Also, if I'm not mistaking, buyers have no right to force sellers to accept a payment method that the seller did not support. Of course you could try to persuade them after you've bought their product, but insisting goes way too far.
sure they do. after you've won an auction or otherwise agreed to buy you are restricted to only the accepted payment methods, but before making a purchase you can contact a seller saying "i'll buy this if you can accept paypal"
Here's a reference - an interview between Elon Musk and Salman Khan: http://www.youtube.com/watch?v=vDwzmJpI4io&feature=player_de.... It's worth a watch.
Great strategy if they actually worked out they could get it back in x time with y users actively using Paypal. The real step is taking the risk. What if only half of the money returns and there is no further adoption? How did they ever take that step? Or were they monitoring the user growth 24/7 and if it didn't match their planned strategy, they would pull the plug on bonuses? Amazing however they managed to pull it off.
"Dating services know what men want (who doesn’t) and seed the network with photos of Latin American models with eclectic interests (not that the latter matters)."
In to...
"Dating services know what women want (who doesn't) and seed the network with wealthy-looking men with genuine personalities (not that the latter matters)."
On a serious note, it probably worked. This might come across as sexist, but aren't we as men more easily "gamed" when it comes to dating? We are very visually oriented...more so than females.
For dating sites, men go where the women are and it's women who have more optionality, including not joining a dating site altogether. So if you're building one you have to think about what your women customers want first and foremost.
"Everybody (Backstreet's Back)" is the first single from the Backstreet Boys' _second_ international album from 1997.
They were huge thanks to their 1996 international album called "Backstreet Boys":
>becoming one of the biggest debut albums ever and contains a number of the band's most memorable singles
In another example of the music industry seeding their own success, I remember when it wasn't uncommon for a major label to ship a number of initial releases to record stores and then buy them back to push their artist up the charts (which were all based on record sales). The result was that the album or single rode high up the charts getting more rotation on terrestrial radio and MTV, until it became a self-fulfulling prophecy and eventually outsold the buy-back investment and then some.
Thanks for the BSB correction :)
Not that I disagree with your comment, just adding a bit of detail.
This happens in many industries, it's a marketing tactic.
Hell even small restaurants seed tables to create atmosphere because no one walks into an empty restaurant.
If I was having a grand opening, I would get every friend there, even if they would never shop at my business, to make the place seem full and busy during the "party".
Obviously this is not on the scale of a start up, but I think the idea of faking initial interest is actually common for any business.
The article hints at how sinister your faking is seems to affect how much backlash you get from it.
* It's too general to be of any use to you.
* It's too specific to be of any use to you.
* It's stuff so obvious you've probably already tried it and it obviously hasn't worked for you.
If there was a formula that worked, everyone would do it. There isn't, so general, vague sounding bullshit is the order of the day. They might as well be prescribing hanging garlic from your door. You get a couple of people who have seen success one way or another, usually through being at the right place at the right time with the right idea in a situation of extreme uniqueness, and they are never helpful. At least not strategically. They probably are helpful in terms of the business of startups: management and fundraising etc.
I think the real lesson is to just build your idea as best as you can and if there's traction it'll work, if there's signal follow it, if you don't get anywhere quickly, try harder or try something else. Or give up.
I can think of very few startups that failed because of shady early tactics, as long as it stayed only a way to get to traction, and wasn't a decisive part of the business model. If you're small, nobody will care enough about you to learn about your tactics. If you're big, you should have enough money to rebuy a reputation with marketing/PR.
Let me explain:
So $business_name faked their way into relevance, $somebody found out about it, $angry_mob_of_other_founders argue and rally against it.
Nothing of this will matter in any way cause it's almost certain Joe Normal will never ever hear the slightest about it and will happily continue using $business_name.
The only possibility of Joe Normal ever finding out is if $business_name overdid it in a way that might prompt (inter)national media to report about it or have it mentioned by a buddy to him.
Even then, he couldn't care less about it cause he still could peddle his wares on the site (or whatever), make a profit from it, and just shrug about the advice given by his buddy.
Honesty is a quality that can only be recognized when someone maintains truthfulness and fair-dealing when they know that they will be punished for it.
Honesty will, if anything, destroy your authenticity.
But yeah, it still works for dating sites (I know someone that started one) and the like. Normally you have to have a couple friends help you, because activity is great, but eventually people want you to jump on the webcam.
Most businesses need to do this at one point or another. If you don't, you will most likely fail.