When the transistor was first invented, it enabled television makers to replace vacuum tubes with devices that were a fraction of the size, many times less power-hungry, more reliable & durable. Did these new transistors get adopted right away? Did TV makers rush to incorporate the new technology into their products?
No, they didn’t. As described by Kevin Kelly in his book New Rules for the New Economy, one particular transistor made by Robert Noyce and his partner Jerry Sanders was all these good things. Problem was, the transistor was significantly more expensive to make ($100 each) than the vacuum tube that was being sold to TV makers for $1.08 each. The partners wanted to sell the devices to UHF tuner makers but they couldn’t sell a part that was nearly 100 times as expensive regardless of how small and efficient it was. They knew that as utilization and production rose, the cost to product the new part would drop to the point it would be more economical than a vacuum tube (not to mention the size, power and other advantages). But they also knews they couldn’t build traction for the adoption of the new part at the higher price.
What did the partners do to motivate people to use the new device and help it take off? They dropped the price to $1.05 each – a few pennies less than the vacuum tube! They dropped the sell price on the part despite the fact they had at the time no sales volume and hadn’t even built the factory to churn them out! As Sanders said, “We were selling into the future.”
How well did this work? UHF tuner manufacturers indeed bought transistors at $1.05 each. Within two years, the cost to manufacturer a transistor dropped so much, the partners could sell them for 50 cents each and still made a profit!
Can this apply to education? I think it can. Take the idea of doing tutoring over the internet. At first this is very costly to set up – hardware; software; technology infrastructure; recruit, train, certify & moderate tutors; build scheduling systems; design customer communication and relationship management tools; curriculum and education resources – this takes a huge investment. But instead of charging what it costs you come up with a price that you think makes sense in the long term. You hope they come and you anticipate the cost efficiency you expect to realize when the volume is there. You sell into the future! That’s what we’re doing at TutorVista.com with unlimited tutoring for a fixed price each month. Make the tutoring budget predictable and part of a simple subscription fee so a student doesn’t need one eye on the tutor and the other eye on the clock.
“If you build it, they will come!” It’s built! Time will tell, but the goal is to revolutionize and redefine what education services should cost and make quality, convenient and effective tutoring available to everyone. …And education for all!
Dr. John Stuppy, john@tutorvista.com
Tuesday, January 15, 2008
Tuesday, January 8, 2008
"The Check’s In The Mail" or "Smart Money?"
A buddy called me – quite excited. “I don’t know how I won, but I won!” he exclaimed. Then he let out a “Whoo hoo!”
“Won what?” I asked.
“Some lottery or sweepstakes!” he replied.
I came right over to his house. He showed me a glossy, nicely printed letter that explained he had won $58,750 in unclaimed prize money and the enclosed check for $3,319 to assist with his “international clearance fee.”
Sounded a little weird to me, but then he handed me his check. It was everything a check should be and then some – a work of art – colorful, watermarked, MICR encoded account number, and was drawn on a company in Dallas Texas. There was quite a bit of very small writing on the back side. I thought, “Heh! That’s where they get you! You cash the $3,319 check and by endorsing it, you have agreed to buy swampland or you’ve taken out a loan at 25% interest or whatever. But the fine print (very very fine for my old eyes) simply said that the check had many features to ensure that its authenticity could be easily determined. It had a watermark, it had patented features like a place for fingerprints with the endorsement, and the real delight was it had special red ink with the patent numbers for this feature and if you blow on or rub the red ink, it disappears. Well I blew and where I did, the red ink disappeared!
“Looks very real, very authentic indeed” I thought.
So I read the letter again. He had won some unclaimed prize money from Readers Digest, Publishers Clearing House, Online gaming, or…” – it wasn’t specific on how or where he had been bestowed with this windfall but here it was. All he had to do is call the US Transfer Agent so-and-so at a particular phone number and take care of paperwork. There was a customer number printed on the letter and bar-coded (presumably) in the margin. My friend was to tell the Transfer Agent his special customer number to claim his prize. And he should definitely NOT reveal this number to anyone else before he collects his winnings lest they jump in line ahead of him and get what’s supposed to be rightfully coming to him.
I suggested we Google-around and see what we could find.
The name of the prize sweepstakes award company on the letterhead and check was “Henry S. Miller Interests.” Google found all kinds of entries for “Henry S. Miller” but nothing for “Interests.” It seems HSM is a long-standing, respected real estate company in Texas.
The bank listed on the check? Yes. It exists. They definitely have a branch office on Preston.
Strange though -- The area code for the phone numbers for the Dallas Texas bank and the US Transfer Agent wasn’t one I recognized. 705. It purported to be a Dallas phone number but I looked that up and it is an area code for Ontario Canada.
I called the number for fun. Got a recording that said their message box was full and to leave a message. More Googling. The phone number for the US Transfer Agent is a cell phone.
Well, by then we figured out (as you no doubt have by now too) that this was a scam. It was clever and different enough though it made a couple people who have been offered and failed to pursue hundreds of millions of dollars in variations of the Nigerian Scam really wonder if this is legit.
Later that afternoon I was at a meeting and mentioned this to a banker. She said it was an active, vigorously pursued scam these days. You call the US Transfer Agent and they tell you they overestimated the cost of the International Transfer Fee and would you please cash the check in your account and wire the difference to them. Of course you HAVE their $3,319 and you can cash the check first and are completely protected.
Trick is the US bank you deposit it into must, by law, give you access to the money you have deposited in a few days. But by the time this pretty, watermarked, special red ink that disappears check makes it’s way to the branch on Preston in Dallas and is discovered to be bogus (no firm of that name, no real account behind it) and back to your bank, you will have already wired the “difference” to the US Transfer Agent and maybe treated yourself to some goodies with what’s left.
Then – days later – your bank tells you the check is no good, charges you $6 for depositing a bad check, and by the way, please pay the bank back the $3,319 you have spent already. You won’t get back your wire transfer and well, you might as well enjoy the goodies you bought because, well, you did buy them and will have to pay for them when you make your bank whole for the money you took out. And the $58,750? Not a chance.
If you search for scams involving “International Transfer Fees” you will see lots of web sites with the always unfortunate tales of people who were bit by this variation of the Nigerian Scam. “I thought I would cash it and even if I didn’t call the guy up and arrange for the international transfer fee, at least I would have the first bit of money” and “I was so sure it was real I made my husband deposit it and then go straight to the travel agent so we could book our Caribbean cruise! He did and then…” Each story was sad and demonstrated how people who would never fall for the “Help me get my dead husband’s millions out of the country” fell victim to this one.
Why did they go along with it? It seems a real check in your hands for money you didn’t know was coming was a big inducement for checking reality at the door. One twenty year old on the web site describing similar scams said, “I understand all this discussion about how this works but I don’t get it…how can they afford to send out all these $3,000-4,000 checks?”
You want to believe the check is good and want to believe you can’t get stung if you deposit it and the bank tells you it’s good before you spend it.
Have you seen similar scams? Why is it the scams by mail have a particularly fresh appeal to people who are otherwise sufficiently hardened to the email scams? Or what’s the uptake on those email scams? I see so many in my inbox in any given week I can’t believe people fall for them, but they must. But this emailed check scam was costing the scammers some money – 90c Canadian in postage (the letter came from Canada and not from the purported Dallas bank), the cost of glossy paper and color printing, and that check was definitely an expensive bit of tom-foolery with its heat sensitive ink.
How do we stay ahead of these guys? And how do we educate people about these scams? Is self-education through web searches the order of the day? Or is this a case not of "Buyer Beware!" but "Casher Beware!"?
John Stuppy, john@tutorvista.com
“Won what?” I asked.
“Some lottery or sweepstakes!” he replied.
I came right over to his house. He showed me a glossy, nicely printed letter that explained he had won $58,750 in unclaimed prize money and the enclosed check for $3,319 to assist with his “international clearance fee.”
Sounded a little weird to me, but then he handed me his check. It was everything a check should be and then some – a work of art – colorful, watermarked, MICR encoded account number, and was drawn on a company in Dallas Texas. There was quite a bit of very small writing on the back side. I thought, “Heh! That’s where they get you! You cash the $3,319 check and by endorsing it, you have agreed to buy swampland or you’ve taken out a loan at 25% interest or whatever. But the fine print (very very fine for my old eyes) simply said that the check had many features to ensure that its authenticity could be easily determined. It had a watermark, it had patented features like a place for fingerprints with the endorsement, and the real delight was it had special red ink with the patent numbers for this feature and if you blow on or rub the red ink, it disappears. Well I blew and where I did, the red ink disappeared!
“Looks very real, very authentic indeed” I thought.
So I read the letter again. He had won some unclaimed prize money from Readers Digest, Publishers Clearing House, Online gaming, or…” – it wasn’t specific on how or where he had been bestowed with this windfall but here it was. All he had to do is call the US Transfer Agent so-and-so at a particular phone number and take care of paperwork. There was a customer number printed on the letter and bar-coded (presumably) in the margin. My friend was to tell the Transfer Agent his special customer number to claim his prize. And he should definitely NOT reveal this number to anyone else before he collects his winnings lest they jump in line ahead of him and get what’s supposed to be rightfully coming to him.
I suggested we Google-around and see what we could find.
The name of the prize sweepstakes award company on the letterhead and check was “Henry S. Miller Interests.” Google found all kinds of entries for “Henry S. Miller” but nothing for “Interests.” It seems HSM is a long-standing, respected real estate company in Texas.
The bank listed on the check? Yes. It exists. They definitely have a branch office on Preston.
Strange though -- The area code for the phone numbers for the Dallas Texas bank and the US Transfer Agent wasn’t one I recognized. 705. It purported to be a Dallas phone number but I looked that up and it is an area code for Ontario Canada.
I called the number for fun. Got a recording that said their message box was full and to leave a message. More Googling. The phone number for the US Transfer Agent is a cell phone.
Well, by then we figured out (as you no doubt have by now too) that this was a scam. It was clever and different enough though it made a couple people who have been offered and failed to pursue hundreds of millions of dollars in variations of the Nigerian Scam really wonder if this is legit.
Later that afternoon I was at a meeting and mentioned this to a banker. She said it was an active, vigorously pursued scam these days. You call the US Transfer Agent and they tell you they overestimated the cost of the International Transfer Fee and would you please cash the check in your account and wire the difference to them. Of course you HAVE their $3,319 and you can cash the check first and are completely protected.
Trick is the US bank you deposit it into must, by law, give you access to the money you have deposited in a few days. But by the time this pretty, watermarked, special red ink that disappears check makes it’s way to the branch on Preston in Dallas and is discovered to be bogus (no firm of that name, no real account behind it) and back to your bank, you will have already wired the “difference” to the US Transfer Agent and maybe treated yourself to some goodies with what’s left.
Then – days later – your bank tells you the check is no good, charges you $6 for depositing a bad check, and by the way, please pay the bank back the $3,319 you have spent already. You won’t get back your wire transfer and well, you might as well enjoy the goodies you bought because, well, you did buy them and will have to pay for them when you make your bank whole for the money you took out. And the $58,750? Not a chance.
If you search for scams involving “International Transfer Fees” you will see lots of web sites with the always unfortunate tales of people who were bit by this variation of the Nigerian Scam. “I thought I would cash it and even if I didn’t call the guy up and arrange for the international transfer fee, at least I would have the first bit of money” and “I was so sure it was real I made my husband deposit it and then go straight to the travel agent so we could book our Caribbean cruise! He did and then…” Each story was sad and demonstrated how people who would never fall for the “Help me get my dead husband’s millions out of the country” fell victim to this one.
Why did they go along with it? It seems a real check in your hands for money you didn’t know was coming was a big inducement for checking reality at the door. One twenty year old on the web site describing similar scams said, “I understand all this discussion about how this works but I don’t get it…how can they afford to send out all these $3,000-4,000 checks?”
You want to believe the check is good and want to believe you can’t get stung if you deposit it and the bank tells you it’s good before you spend it.
Have you seen similar scams? Why is it the scams by mail have a particularly fresh appeal to people who are otherwise sufficiently hardened to the email scams? Or what’s the uptake on those email scams? I see so many in my inbox in any given week I can’t believe people fall for them, but they must. But this emailed check scam was costing the scammers some money – 90c Canadian in postage (the letter came from Canada and not from the purported Dallas bank), the cost of glossy paper and color printing, and that check was definitely an expensive bit of tom-foolery with its heat sensitive ink.
How do we stay ahead of these guys? And how do we educate people about these scams? Is self-education through web searches the order of the day? Or is this a case not of "Buyer Beware!" but "Casher Beware!"?
John Stuppy, john@tutorvista.com
Tuesday, January 1, 2008
Happy New Year!
Wishing you a safe, prosperous, healthy and happy new year!
Check out my guest blog in Education Week today . . .
http://blogs.edweek.org/edweek/edbizbuzz/
John
Check out my guest blog in Education Week today . . .
http://blogs.edweek.org/edweek/edbizbuzz/
John
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