Re:Why can a scam company raise $40 Million Series C + $76 M...
by rtb on Friday September 27, 2013 @04:04AM
(#6455865)
Exactly - it's a scam and if it gets enough traction hopefully it will be explicitly illegal soon (v.s. just arguably illegal via general anti fraud statutes).
See the <a href="https://news.ycombinator.com/item?id=6455718">comment</a> from "Semaphor" below; this type of scam is already explicitly illegal in Germany.
Re:Why can a scam company raise $40 Million Series C + $76 M...
by espeed on Friday September 27, 2013 @03:57AM
(#6455848)
On the checkout page, they are applying the type of behavior design/economics research done by Dan Ariely at MIT ("Predictably Irrational" http://www.ted.com/talks/dan_ariely_asks_are_we_in_control_o...) and the Stanford Persuasive Tech Lab (http://captology.stanford.edu/).
Re:Why can a scam company raise $40 Million Series C + $76 M...
by jeromeparadis on Friday September 27, 2013 @08:40AM
(#6456641)
At least, these scams would ship you something! It would remind you they decided to scam you by sending you an overprice item. Justfab got the genius idea that it is much more profitable to have apparently nicely priced items that you won't order or receive but still be charged for.
I casually discarded those, blaming it on the new-found business astuteness of the society I lived in, but it seems this kind of scam is still around.
I'm calling it scam because, where I live, this type of business was actually considered a scam, and I think this went to the extent that they passed legislation to ensure their activity is regulated. They were required to clearly state the subscription model, in a separate box, delimited with clear colors and a bright background. Needless to say, they died out in less than a year.
The website obviously works, and is profitable, because it deliberately misinforms customers, and I think investing in this kind of business is very short-sighted. Not for you directly, since I presume it will bring you enough profit, but for the economy at large: this kind of activity adds no value whatsoever to anything, no one's life is substantially and essentially improved, all that happens is that some money change hands without producing any meaningful result. It's an economic plague.
I'm not casting judgement on yourself for investing in this business, particularly since I'm not willing to start a debate (on the Internet, of all things) about the "but everyone does it" argument. But defending this kind of shady practice is pretty low.
(Edited the rather rude words that were initially there instead of "pretty low")