Random Thoughts – Randocity!

A history of the DIVX DVD

Posted in botch, business, movies by commorancy on April 29, 2018

In 1998 (almost 20 years ago), a new DVD rental format arrived named DIVX (aka Digital Video Express). It purported to be a DVD rental format that had no late fees and the media didn’t need to be returned… at least those were the benefits purported to the consumer. What they didn’t tell you was that you would need to buy a brand new expensive DVD player to play them. Let’s explore.

DIVX versus DivX

To get this confusion cleared up quickly, DIVX was a brand name assigned to a new DVD rental standard introduced by Circuit City and the entertainment law firm Ziffren, Brittenham, Branca and Fischer in 1998. However, it’s not entirely clear what problem Circuit City was trying to solve by introducing the DIVX rental format when DVD was already useful enough for rentals.

The DIVX brand name, introduced by Circuit City, bears no relationship to the DivX or Xvid video encoding standards. Even though there is no relationship by Circuit City to the DivX encoder, there is a slight reverse relationship from the DivX encoder to the DIVX brand. In fact, the original name of the DivX encoder was actually DivX ;-)

Yes, this encoder name included the winking smiley. This smiley was actually a nod (and sarcasm) towards Circuit City’s then soon-to-be-defunct DIVX rental standard. Here’s what the DivX Wikipedia article says of the early days of the video encoder named DivX ;-).

DivX ;-) (not DivX) 3.11 Alpha and later 3.xx versions refers to a hacked version of the Microsoft MPEG-4 Version 3 video codec (not to be confused with MPEG-4 Part 3) from Windows Media Tools 4 codecs. The video codec, which was actually not MPEG-4 compliant, was extracted around 1998 by French hacker Jerome Rota (also known as Gej) at Montpellier.

So then, what does DivX ;-) have to do with the DIVX DVD format? Not much other than DivX ;-) making a tongue-in-cheek poke at Circuit City’s DIVX rental format. Hopefully, this clears up any confusion around this convoluted naming.

DIVX as a rental standard

The primary impetus to build the new DIVX rental standard by Circuit City was probably brand recognition. At the time, Circuit City was considered the second largest electronics retailer behind Best Buy. The Circuit City management was obviously willing to do anything to become the number one electronics retailer, including dreaming up technology ideas that didn’t need to be built. Meaning that by 1998, Blockbuster had the rental market sewn up. However, Circuit City sought to disrupt that by trying to create a new standard that not only simultaneously upset Blockbuster’s cart, but introduced a new format that would bring more recognition to the Circuit City brand (and, of course, generate more hardware and rental sales). As a side note, Circuit City was also the second largest appliance retailer behind Sears at that time.

Here’s the Circuit City’s DIVX promo video (skip to 0:17 to begin an unrealistic family scenario, press 1 to skip the intro entirely or jump to 4:19 to begin use case demonstration). Don’t feel obligated to watch the whole thing.

Now, let’s watch this training video to better understand how then CEO Richard L. Sharp saw DIVX’s future within Circuit City. Pay close attention to his statements during the opening segments of this video. Again, don’t feel obligated to watch the whole thing.

Unfortunately, Circuit City’s management goals were way too ambitious and overconfident. They also dropped into a rabbit hole with this DIVX venture that took them away from their core retail business and caused them to spend millions to create and support a format that didn’t live up to the hype. In fact, it might even be considered that failure of the DIVX format ushered in the downward slide of Circuit City into oblivion. While Circuit City was a reasonable electronics retailer, they didn’t have any presence in the video rental market. When they introduced DIVX, the assumed strategy was to add $4-5 rentals and boost DVD player sales in the Circuit City and Good Guys stores. The management team thought that this rental business would somehow take them to the next level. If only they had adopted standard DVD rentals instead.

As shown in the demo, DIVX boasted a 48 hour rental period with no need to return the disc when the rental period ended. However, to use DIVX, you had to invest in a brand new type of DVD player that also supported the DIVX format. Tada! Here’s the catch. This is also where Circuit City comes into the picture. You’d have to run on over to your local Circuit City (or one of several other retailers owned by CC, like Good Guys) to buy one of these newfangled DIVX DVD player doodads. A doodad that might cost you $100-150 more than a DVD player without DIVX. At least, this is what the management at Circuit City hoped you would do.

This idea for introducing this new format was a huge misfire for Circuit City. In addition to the picture quality problems described just below, the DIVX player contained a modem that required the player to dial-up and register itself before you could play any DIVX discs. It also apparently dialed-up twice a day to register any new purchases and download advertisements. This modem required a physical telephone line plugged into the unit to dial home. This then authorized not only your player, but supplied the player with the necessary information to authorize playback of a rental disc you recently picked up. This concept all worked reasonably well, except for the fact that several privacy groups felt that this dial home feature meant that Circuit City (or whomever) could keep tabs on your viewing habits. Little did we know then exactly how much spying would become commonplace with sites like Google and Facebook. Anyway, that privacy concern didn’t help boost efforts to sell DIVX into main stream. Of course, it wasn’t the only problem.

Poor Movie Quality

The actual DIVX DVDs themselves failed to contain the more advanced features found on a standard DVD, such as 16:9 anamorphic widescreen needed to fill a large flat panel. DIVX movie discs also failed to contain alternate audio commentary and extra features commonly found on standard DVDs. Instead, these DIVX DVDs simply contained 4:3 cropped pan and scan versions of the film… a subpar version. This was a huge misfire for the format. When you can get a better looking film on standard DVD, why would you rent the crappier DIVX format for $5? Yet more consumer dilemma.

Consumer Misunderstanding

Because a DIVX DVD appears to be a standard DVD (it looks the same), some consumers didn’t understand that they needed to buy a new player to play the DIVX media. Instead, they bought the DIVX disc, took it home and inserted it into their regular DVD players only to find that it failed to work. They would then find that they couldn’t return the disc because it was open. The misunderstanding of this new format caused grief among would-be consumers and left a sour taste for this format. This problem only served to fracture the DVD market. Worse, who’s willing to buy a brand new and expensive DIVX player just to recover a $5 loss? Not many. This problem didn’t serve Circuit City well.

It seems that Circuit City’s commercials likely didn’t much help clear this misunderstanding. Let’s watch a Circuit City commercial from this era with that same guy from the Demo reel:

There were also a number of commercials released during 1998 and 1999 that failed to mention DIVX at all… like the following commercial from 1998. You’d think a company like Circuit City spending millions to try and force adoption of their new brainchild would advertise the DIVX format on every commercial, if even only a mention at the very end. Nope. You can’t sell something if you don’t market it.

Landfill Problems

One of the touted benefits to consumers would be throw-away discs. You’d spend $4-5 for each disc, but you didn’t need to return any discs after the 48 hour watching period was over. This also meant no late fees. You simply tossed the disc into the garbage can. This idea was to hit Blockbuster where it hurt. Blockbuster was the king of late fees at the time. A few months after introduction of this idea, Circuit City stores set up recycle containers to entice users to recycle used DIVX discs at Circuit City stores instead of throwing them into the trash. Not sure how well that worked.

Licensing Issues and Retailers

As a result of Circuit City’s involvement with DIVX (along with a legal team), for other retailers to sell DIVX compatible players required paying a licensing fee to Circuit City. As a result of the licensing fees, Best Buy and other retailers shunned the players choosing to avoid paying those fees. It’s no wonder, either. Why would you ever agree to pay another retailer money just to sell one of their products? You wouldn’t. This was a completely foreseeable miscalculation by the Circuit City management team.

This meant that Circuit City and other stores owned by Circuit City ended up the sole sellers of these players (and the DIVX format). Without wider support via other retailers, this format really had no hope of surviving. Circuit City should have dropped the idea for licensing fees quickly just to get better entrenchment for the format. It’s not like it wasn’t already costing Circuit City a mint to keep this format alive. Stupid is as stupid does.

Movie Studio Support

On the plus side for the format, because of what studios considered weak protection technologies associated with standard DVD (CSS), many studios jumped on board with the DIVX’s CSS + Triple DES protection standard. This boosted the initial ~20 titles when it arrived in summer of 1998 to well over 400 titles by early 1999. Some early studio adopters were 20th Century Fox, Disney and Dreamworks. Wikipedia says:

The initial trial of the DIVX format was run in the San Francisco and Richmond, California, areas starting on June 8, 1998. Initially only a single Zenith player was available, along with 19 titles. A nationwide rollout began three months later, on September 25, with players and 150 titles available in 190 stores. In total 87,000 players were sold during 1998, with 535,000 discs across 300 titles being sold.

The studios felt that the DIVX format offered a more solid encryption technique to protect their movie content. I’m sure they did. Due to the arcane structure needed to authorize the movie rental, it meant jumping through hoops just to get your movie to play. The movie studios love making consumers jump through hoops to play their content.

This quick studio adoption rate was a bone of contention because some studios began exclusively releasing their films onto the DIVX format instead of DVD. This issue caused further problems for the format and more consumer backlash erupted and threatened to fracture the industry into a new format war.

On the other hand, Sony and Warner Home Video, which at the time apparently comprised up to 40% of the movie rental market, refused to release their movies on DIVX. The primary reason for this refusal was that both of these companies had a stake in the success of standard DVD format. Supporting the DIVX standard would be a conflict of interest.

By spring of 1999, the number of titles had increased to over 410. Little did Circuit City or the consumers realize the end was near for DIVX. Due to mounting pressures and costs, Circuit City didn’t realize how much of an albatross that DIVX would become. There was just no way Circuit City could go this new format alone without wider industry investment and consumer acceptance.

Overconfidence

Circuit City’s biggest mistake was its heavily miscalculated financial ability to support this newly created format. After all, Circuit City is a retailer, not a tech innovator. Driving a new tech format through a retail company already has many hurdles and reputational issues to overcome. Circuit City was also too confident in its ability to entice other retailers to make this format succeed. Those retailers didn’t bite. Even in 1998 when this format came about, Internet RFCs were still a thing. Circuit City entirely avoided the RFC and Whitepaper approach that had become commonplace to announce new technologies. Instead, they launched this format without much fanfare hoping that the party train would show up. It didn’t.

Because of all of the above and including backlash from consumers and lack of retailer support, Circuit City way overestimated its ability to get this format adopted… and why would anyone want to adopt this format? With licensing fees, there was no incentive for non-affiliated retailers to adopt some other retailer’s idea as practical or realistic… especially when the standard DVD already provided a better rental and sales format.

Without the necessary support by consumers and other retailers alike, the format was doomed from the go. By the summer of 1999 (just 1 year after it launched), the format officially died on June 16th, 1999 (almost exactly year since it had launched). However, due to format commitments to existing consumers, it would limp this format along until 2001. Wikipedia writes of the DIVX demise:

The format was discontinued on June 16, 1999, because of the costs of introducing the format, as well as its very limited acceptance by the general public. It was shot down by Blockbuster Video stores not wanting to carry it. Also Circuit City announced a $114 million after-tax loss, and Variety estimated the total loss on the scheme was around $337 million. Over the next two years the DIVX system was phased out. Customers could still view all their DIVX discs and were given a $100 refund for every player that was purchased before June 16, 1999. All discs that were unsold at the end of the summer of 1999 were destroyed. The program officially cut off access to accounts on July 7, 2001.

Retail, DRM and Tech Innovation Don’t Mix

Due to the conflict of interest between the Circuit City chain, other retailers, licensing and this new format, there was ultimately no way this idea could survive. Circuit City made so many missteps along the way to adoption, the format was doomed from the outset. Even the management should have been able to foresee this event. If Circuit City had spun off the DIVX idea into a separate holding company that Circuit City had founded and enticed other retailers in (to avoid licensing requirements), the standard might have had a chance of surviving. While DRM was a relatively new thing in 1999, consumers could already begin to see how it could become a problem in the way they viewed content with DIVX (and other formats).

The Future of the Movies at Home

Even if DIVX had managed to make the slightest dent in the rental market (hint: it didn’t), the future of Internet streaming movies would have still seen to its demise. Even in 1997, a year before DIVX came to exist, Reed Hastings was in the process of setting up Netflix. By 2002, Redbox led the downfall of Blockbuster through it’s DVD rental kiosks. Some people blame Netflix on the death of Blockbuster, but it is firmly the self-service and low cost nature of the Redbox kiosk that ushered Blockbuster out the door. Yes, Netflix started Blockbuster’s problems, Redbox nailed Blockbuster’s doors shut. Blockbuster simply couldn’t compete with $1 DVD rentals at a time when Blockbuster was still charging sometimes $5 per disc. Netflix chose a per month plan fee with limits and was (and still is) charging well more than $1 per disc that Redbox adopted. In fact, Redbox is still the best deal going for both DVD and Blu-ray rentals, even though their prices have somewhat increased.

Getting back to DIVX, Netflix’s movie streaming, along side Redbox, Amazon, Hulu, Vudu, Crackle, YouTube, YouTube Red and others would have killed the DIVX DVD format anyway. Ultimately, DIVX didn’t have a place in the market or a problem to solve. It was already behind the times when it was introduced by a company that didn’t have the capital to invest in the longevity of such a format.

In short, Circuit City bit off well more than they could chew with DIVX. Today, these DIVX players are essentially worthless for playing DIVX format discs. Because the players could play standard DVD format discs also, this is their only redeeming point.  There’s no way to authorize the players or discs as the service has been dismantled. If you have any DIVX discs in your collection, they can no longer be played as there’s no way to authorize the players or discs.

Even today, DVD is so way behind the times when compared with UltraHD 4K, even that would have killed DIVX in short order. Ultimately, even if DIVX had managed to survive longer than 1 year on the market, it would have eventually died because of movie streaming services. There was just no way for DIVX to compete with that. However, it died long before that happened simply because of Circuit City.

Final Death of DIVX

The DIVX format supported limited viewings as well as unlimited viewings (DIVX Silver). Limited viewings of a disc were based on your rental period. Unlimited viewings cost more and was known as DIVX Silver. Why this is important is that the players still needed to dial home to verify the viewing of each play of the movie. After June 30, 2001, the DIVX service was shuttered including the dial home feature. For those who had purchased into DIVX Silver for some of their films, they could request a refund before the service was shuttered. This meant that any further viewings of DIVX movies after June 30, 2001 were impossible, rendering the DIVX format and the DIVX portion of the players useless.

The LA Times wrote of DVIX’s failure on June 17, 1999:

But the venture never connected with consumers and represented a major miscalculation of both the market and the video industry by the nation’s second-largest consumer electronics retailer.

The failure of Divx is an embarrassment for Richard Sharp, chief executive of Circuit City Stores. Sharp fought an uphill battle to promote the venture, which became a significant drag on Circuit City’s bottom line.

Sharp declined to comment Wednesday, but the market cheered the decision to junk Divx. Circuit City’s stock closed at $90.38, up $8.38 on the New York Stock Exchange.

 

A Cautionary Tale

This whole DIVX situation serves as a cautionary tale for early adopters of technology when produced by a company that’s never been in that business. This is particularly a problem considering the DIVX players required so much constant hand-holding with home base. If that home base connection were unavailable (i.e., Circuit City closed the service), the  movies would stop working, which is exactly what happened in the end. Why would you, as a consumer, want to buy into a media format that’s so heavily dependent on a third party’s continued success. The other problem is that the players chose to use a phone line instead of phoning home over the Internet. Of course, had the format lived, it would have been relatively trivial to introduce new players that supported Internet always-on capabilities.

The real cautionary tale here is that consumers should never early adopt into entertainment content that relies on phoning home to authorize each viewing. One could argue that Netflix is a form of this, but I’d argue it isn’t. When you use Netflix, the movie is either there or it isn’t. There’s no pulling-the-rug-out-from-under tactics. Meaning, you leave your media sitting for a few months only to find that it will no longer play. Standard DVD movies have never required authorization per play. However, Blu-ray technology has instituted a somewhat similar phone home approach, but so far this hasn’t been an issue. However, should Sony die or the servers cease to exist that enables a specific Blu-ray to function, we could find that Blu-rays become coasters at some point in the future like the DIVX media.

If you happen to own a DIVX player and any DIVX media, know that it’s dead and it’s not coming back. There is really no way to revive it. The decryption keys and the authorization service that allowed each movie to work have long been dismantled. As far as I know, there has never been anyone willing to reverse engineer this phone home service to allow old DIVX media to play. Though, why bother? The movies were mostly of inferior quality. Other than as a novelty of showing a functional DIVX movie off on a YouTube electronics history channel or possibly for nostalgia, there’s no other legitimate reasons to want to watch DIVX movies today.

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Shadow Profiling: Should I be concerned?

Posted in botch, business, california by commorancy on April 25, 2018

Recently with Facebook’s fall from grace, another issue has surfaced at Facebook: Shadow Profiling. Yes, you should be concerned. Let’s explore.

Facebook and Cambridge Analytica

With Cambridge Analytica, Facebook got caught with its pants down. Facebook allowed Cambridge Analytica, a known data broker, to mine data from Facebook’s network at a time when Facebook was vulnerable to such attacks. Facebook has been, for years, skirting every privacy initiative. In fact, Facebook didn’t want to implement any privacy controls, truth be told. They wanted to keep everything as open and accessible as possible. On the one hand, I can understand this… because it makes it easier for people to find other people. On the other hand, people’s data is their own. These are two parallel lines that will never meet.

I won’t go into every single little problem that Facebook has run into along the way, but suffice it to say that Facebook has taken baby steps to implement privacy. In 2014 when Cambridge Analytica did its mining, Facebook hadn’t implemented many controls to prevent such data mining attacks via their APIs. In fact, one might even call Facebook egregiously wilful in not implementing such data protections. Sure, they had implemented some in their web UI for user-to-user control, but not on the backend where businesses operate.

After Cambridge Analytica performed its mining operation, Facebook claims to have plugged-that-hole the same year to prevent any further Cambridge-Analytica’s from doing the same thing. Likely, they saw what CA had done and realized they were gamed and closed the hole. Of course, too little, too late. And, they didn’t disclose this fact to the public. It wouldn’t be until 2018 (4 years later) when Facebook got caught.

I won’t get into just how close Cambridge Analytica was to Facebook between then and now (hint: they occupied the same office space in 2016), but suffice it to say that Facebook was well aware of Cambridge Analytica and what business line they are in. To feign ignorance about another business using your network is so disingenuous as to be a lie.

This is all the pretext that opened the door to further scrutiny for Facebook.

Government Hearings

As a result of Facebook’s conduct back in 2014, many governments have interviewed (and will continue) to interview Mark Zuckerberg over Facebook’s conduct at that time. In that process, many side things have been uncovered. One of those things coming to light is shadow profiling. What exactly is shadow profiling?

A shadow profile is data collected about you without your knowledge. It might be data from public records, it might be personally identifying information such as email address, phone number, birth date, home address, social security, public information you share on Facebook or Twitter or Amazon. In Facebook’s case, they are collecting data about you via photos of you (facial recognition), through text messaging through WhatsApp and via other messaging means. Even simply visiting a site where you do have a login and where Facebook hosts comments is enough to gather data about you. The list goes on and on.

Facebook and Profiling

Let’s understand that many companies have shadow profiles on you, not just Facebook. Facebook is obviously one in a long list of companies that perform shadow profiling, but don’t kid yourself, Facebook is not alone in this practice. Companies such as LexisNexis, insurance companies and credit bureaus collect this information. In fact, credit bureaus hold a mountain of personal data so important that even the tiniest leak could cause immediate irreparable damage to those affected. Damage such as identity theft. Theft that, in fact, could be so bad you’d need to have a new social security number issued (along with all of your credit card numbers, phone numbers and the list goes on). Equifax found this out the hard way… and, I don’t think we’re done with these credit bureau hacks yet. It’s only going to get worse.

I digress. There are many companies that collect data about you without your knowledge. Facebook just got caught at it after this information was unceremoniously disclosed. But, don’t kid yourself that Facebook is alone in this. Google does this also. In fact, Google probably has more data on you than even Facebook has… even if you’ve never ever had a Google account. Why? Because you’ve inevitably sent email to someone@gmail.com or to a domain hosted by Google.

Google has already said they scour emails for content that helps target advertising to the Google user. If they’re scouring emails, they’ve inevitably found your email address, your phone number, address, first and last name and on and on. Google doesn’t have to do anything with this data, but it is almost certain that they store it for use later. Why? Because if you ever do create an account, they’ll already have data on you and things you like. It will make targeting ads to you much easier.

Don’t kid yourself, Facebook isn’t the only company keeping shadow profile data on people who do and don’t use their networks.

Reviewing Shadow Data

Unfortunately, to review or delete any data that Facebook has collected on you, you must first create an account. As soon as you do that, they’ve roped you in. Once you create an account, you can then download the data and see what they’ve collected. Then, you can go through the request Facebook to delete that data and your newly created account.

However, that means you are firmly in their system. Even when you ask to have your data deleted, Facebook is under absolutely no obligation to delete any data from their systems. The only thing they need do is make it not visible through their APIs and Web UI, but that’s like hiding your iPad under your bed. You can’t see it, but it’s definitely still there.

Request Shadow Data Removal

So, you’ve decided to create an account so you can request deletion. Even if Facebook does delete some data, there’s no guarantee they’ll delete every copy of it. Companies today utilize many technologies to manage, mine, extrapolate and handle user data. These systems include short term storage (hard drives), long term storage systems, multiple copy offsite backup systems, local hard drives, AWS glacier, billing systems, text based log files, marketing and advertising systems and even analytics systems such as Splunk or Kibana.

In fact, companies today have so many systems storing bits and pieces of your personal data, it’s nearly impossible for a company to actually delete ALL of your data. There will be some amount of your data that will continue to exist in at least one system somewhere on their property. That’s a guarantee. Chances are, it will exist in a whole lot more places then one.

Continued Shadow Profiling

Even if you do request your data to be removed by Facebook, it’s an entirely fleeting effort. Why? Because as soon as you’ve logged in and requested deletion and they do so, Facebook will continue their data collections efforts right after. Your request for deletion is a single point-in-time request. That request isn’t perpetual going forward. It’s a one-shot-deal. Facebook will continue collecting data on you going forward from that point. It is then entirely pointless to request deletion because within 1 year, they will have collected it all again.

In fact, there is no way to permanently request Facebook to not shadow profile your data. It is left up to you to recreate your account and request deletion every year. You may not even be able to do this more than once. Once you’ve deleted a Facebook account, that placeholder may be held in a locked state preventing you or anyone else from opening it again. At this point, any data they may have collected after you’ve requested deletion is entirely locked out from you.

For this reason, I’d suggest not requesting data deletion at all. At least, not until some laws come into effect that require Facebook and similar companies to stop shadow profiling and permanently delete data from any shadow profiling efforts.

Note that if you have even one friend who continues to use Facebook and you interact with that friend on any Facebook property (text messages, email, etc), Facebook can continue to pull that data on you and create / add to your shadow profile. Don’t think you’re safe by logging in and requesting deletion. If you’re dissatisfied by this outcome, reach out to your state representatives and request them to introduce legislation to regulate this practice.

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Marketing, Facebook & Data Privacy

Posted in botch, business, california by commorancy on April 14, 2018

FacebookLockHow is marketing related to Facebook and data privacy? These all fall under the same umbrella. Should you be concerned? Yes, you should be. Let’s explore.

Email Marketing

Let’s start with email marketing first, the precursor to social marketing. I’ve worked in the email marketing industry for the last 17 years at an operational level. I’ve worked on general email systems for over 25+ years. So, I fully understand at all levels how email and email marketing works and what is required to make it continue to work in today’s world.

Email marketing became a “thing” in the mid-late 1990s in earnest. Before that, people dabbled in email marketing to the chagrin of many early internet users. It was around this time that the term ‘spam’ was coined to denote unwanted / unsolicited email.

Over the years, email marketing has evolved into a big business with firms now utilizing marketing automation systems. These systems help you marketers manage their email marketing campaign efforts.

In the beginning, as a marketer, you had a list of emails and you sent content to those addresses. The content was the same to each user. There was no thought to personalization, tailored content or privacy of any of this data. Emails were sent using cron jobs via command line tools using Sendmail. This was initially the most basic form of email marketing. This would have been in 90s.

Evolution of Email Marketing

By the 2005, email marketing had evolved from its simplistic roots into more sophisticated systems using dedicated email marketing software from companies like Port 25 and OmniTI. These email server solutions facilitated the trend of building sophisticated marketing automation UI systems on top of these robust, fast, scalable and customizable email delivery systems.

By 2018, these underlying email softwares now include the ability to send push notifications to apps and also offer sophisticated clustering systems to allow for highly scalable, highly available infrastructure offering incredibly fast delivery times.

On top of these infrastructures sit today’s marketing automation solutions. These systems offer such features as list management, drip marketing, recipient nurturing, automagic feedback reporting and detailed reporting of how each campaign is doing.

List Management

Back in the early days, list management was a chore. You had to deal with adding and removing new entries yourself manually. In reality, few marketers ever practiced real list hygiene. Most would add new entries, but never remove people who didn’t want to see that content. It was just too much of a hassle culling through thousands of email addresses. This is why email marketing got such a bad rap. Marketer didn’t take the time to remove users from their lists.

As of today, it is now legally required to remove recipients timely from lists in most countries. If you don’t remove addresses timely, your company (and possibly even you personally) may be held liable for failure to remove an address.

If you use a legitimate email marketing company today (one that upholds legal compliance), they will automatically handle opt-out requests for every email you send. No need to worry about if you’re compliant as email marketing firms automatically add links to handle all of this for you, as long as you use their database.

Recipient Likes and Preferences

Email marketing has a huge drawback (well, two actually). The first and biggest drawback, the inability to understand the user’s likes and wants. There’s just no real way to get that level of detail out of a particular recipient simply because email interactions are so few and far between. You can’t get what you need out of email marketing to effectively target each individual user in a way that makes sense for their likes, product preferences, location and personal information…. at least, not without using more advanced features like drip marketing and advanced real-time feedback. Email marketing is typically just too hands-off for this type of experience. Enter the second problem…

Evolution of Social Marketing

The second drawback is that while email marketing today is still a very valuable form of communication, it is becoming old and dated technologically. Email clients haven’t been updated in a very long time, technologically and interactively speaking. Basically, the features that were commonplace in email by the late 90s are still the standards that we’re rocking today. In other words, email clients don’t support updated technologies like video and audio content right in the email. You have to click to a web page to see this type of interactive content. The best an email can do is an animated GIF, and that’s of little consolation when you’re wanting to offer much, much more interactive content.

In comes social media. Sites like Twitter and Facebook and Snapchat and, to some degree, even YouTube offer better ways to find like-minded folks and advertise to them. Marketers also have a lot of the same tools at their disposal, like list upload to find their existing users on Facebook. Unlike email which is pretty much a one-way system, social media offers two way interaction. People share their family information, their favorite products, their favorite restaurants, their friend information and so on. All of this sharing means more ways for marketers to mine that information about a specific individual. This information is, in fact, a gold mine for advertisers. It means that instead of the mostly one-way interactions and guessing with email, advertisers can now utilize the two way interactions of social media and find out what a user likes very quickly.

Amazon follows this trend with its own systems by targeting users with product ads that third parties purchase. It’s a way to target users with products and services the user is most likely to be interested in.

Of course, these are not perfect systems. There’s still a certain amount of guessing involved. Social marketing are only offering seemingly relevant best guess suggestions based on other people’s social and purchasing habits. However, social guesses at least based on actual data of purchase history and other shared information, rather than a near completely blind guess that email marketing uses.

Facebook and Privacy

In order for these suggestion systems to work, they must have enough information about your buying habits, what you already own, how many people are in your family, their ages, if you have pets, what car you drive and so on. The more companies know about your personal habits, the more they can target products that make sense to you. It’s a catch-22 though. The more they know, the more dangerous it is for you. Sharing your personal information means someone could learn about you and your habits and then steal your identity.

Enter Facebook. Facebook collects all of this data and more about you. They then mine this data on behalf of their advertisers. Advertisers submit their product(s) to Facebook for advertisement on its platform. The system then finds folks, based on their shared content and interests and displays an ad for a product you might be interested in. If you talked about cancer in a wall post, an ad might pop up for oncology services.

This heavily personalized advertisement system is a far cry from the old cold guess email marketing. However, social marketing was born from the idea of email. Email has now been trying to catch up and compete with this more interactive and interest-based advertising system. Unfortunately, email is firmly entrenched in the past. It’s great for individual communication. For predictive communication, email sorely lacks. Worse, it’s not likely to ever catch up in this area. Though, it’s still a good medium when combined with social marketing. Meaning, if you can mine people’s interests out of social platforms, you can then target them with products and services via email.

Data Privacy

Here’s where Facebook has failed time and time again. When someone uses a social platform to share information, it is expected that that information will remain private and only be shared with those folks whom have been allowed to see it. Or, more specifically, shared with people licensed to see it based on the agreed terms and conditions.

However, Facebook only offers a very basic permissions system. Extensive permissions systems have been available on operating systems for years. Yet, Facebook’s platform didn’t start out that way and still isn’t anywhere close. Facebook started with no privacy at all. Your data was published for everyone to see. As time progressed and people complained, Facebook added more and more user controllable permissions.

For each step that Facebook took, it consisted of tiny baby steps. They’d add incremental protection of that data, just enough to satisfy a single complaint. But, they’d leave plenty of other data exposed. As they would take more baby steps, they would implement one more control, then another, then another and on and on to where we are today. Instead of designing a system that offered robust privacy from the beginning, Facebook opted to build it piece by piece as they went along… sometimes backtracking in certain areas,

While Facebook’s user privacy controls were fairly robust by 2014 (user to user), Facebook still didn’t have much in the way of privacy when using its application programming interface (API). Developers could sign up and extract data via this API with far fewer boundaries. It wouldn’t be until later when Facebook, yet again, took another baby step that they would limit what developers could extract. By then, it was too late for Facebook to do anything about Cambridge Analytica, a company whose data brokerage business model is all about selling collected data.

Abuse

Email marketing has long recognized abuse to be a big factor in the industry. Handling abuse is what distinguishes good actors from bad. Sites such as Spamhaus exist to watchdog and prevent such email abuse and enforce industry best practices. While email marketers have had to grow much more knowledgeable about email marketing best practices, Facebook is entirely new territory for marketers with no such outside policing as Spamhaus. Even new email tools such as DMARC, DKIM and SPF have grown to help protect and legitimize the email marketing industry. Nothing like these exist for social marketing.

While Spamhaus helps to protect and prevent unwanted spam from random third parties, there is no such watchdog to protect your data from unwanted prying eyes within companies like Facebook or Twitter. With email abuse, there are also organizations like MAAWG to also help manage that email abuse. Again, there’s nothing offered on Facebook, except whatever Facebook decides is necessary. You’re at the mercy of Facebook to give you those tools, and currently their solutions are limited and swayed entirely to Facebook’s best monetary interests.

On the one hand, most people are very protective of giving out their email address to random people. Yet, on the other these same folks are completely willing to log into Facebook, Instagram, Snapchat, Whatsapp and Twitter and give up their every day lives, their pet’s name, their employer, their spouse’s name, their location and sometimes even their phone number, email address or other personally identifying information (PII). Worse, Facebook now requires the use of what appears to be a valid First and Last name, though you can put any data you want into those fields and there’s no way for Facebook to verify this. Other social platforms don’t require this. This Facebook requirement ensures the lack of privacy and that users can be targeted by outside third parties. It also ensures that data can be e-pended by outside parties.

Abuse of email has real tangible penalties behind it. Abuse of social networks only has a single company behind it, like Twitter or Facebook. There are no industry standard watchdog groups out there helping guide marketing organizations towards best practices. In fact, such a watchdog group couldn’t really exist because, unlike email, there are no sanctions that could work to stop bad actors short of asking their ISPs to stop routing traffic for those companies. Such a move would likely be met with a huge legal backlash from the company. After all, the ISP did sign contracts to supply service to Facebook. If they cut off peering to them, Facebook would have them for legal lunch. Nope, there’s no sanction against a company like Facebook that could work. Not even a lawsuit could be all that effective.

Instead, these unstoppable organizations are in it to make money off of your data. For this reason, this is why companies like Cambridge Analytica can come to exist on Facebook and steal 87 million (or more) users’ data. This is why there’s nothing Congress can do to Facebook. No laws means nothing to enforce. The only thing Congress (or each state) can do is enact laws to protect each person’s data and force Facebook to become legally compliant with those laws. Of course, Facebook might face other laws they could have run afoul, but because the US has no real data privacy laws, there’s nothing here to enforce… even with companies like Cambridge Analytica.

Protecting Your Privacy

Only you can protect your privacy and your data. You can’t leave it to companies to do this for you… particularly if you live in the United States. If you want to share everything you do with the world, then you can’t easily protect your privacy. Note that even if you never put a single piece of personally identifying information online, you still may have shared enough other minimally identifying information that when put together, someone can eventually identify you.

For example, if you visit Starbucks every day to take a photo of your coffee cup each morning, someone could find that particular Starbucks and stalk your movement there. They could hear you give the cashier your name or other personal information. They might listen for your name to be called. They might bump into you intentionally to make you drop your stuff. They might watch you get into your car and take down your plate number. They might even follow you home. This is why sharing your everything you do online can be dangerous.

Even if you never give your real first name, last name, address, phone number or other information, you (or your friends) may have shared enough photos, locations and friend information to eventually identify you. This information isn’t considered personally identifying information alone, but when pieced together, it is. With enough data pieced together, someone might find out who you are, where you live, your address and possibly even your phone number… maybe even other data such as SS#, CC# or anything else were they to obtain some of your mail.

This is, of course, all made worse by companies like Facebook that don’t take data privacy seriously and only produce half-baked “security theater” mechanisms designed to look like they protect you, but that in reality they don’t. You’re continually putting your data into the hands of folks like Mark Zuckerberg who has, time and time again, shown that his platform cannot be trusted to store personal data.

Security Theater

While email marketing now has a robust set of industry checks and balances, technological measures, industry watchdogs, laws and best practices… social marketing offers very limited controls. The reason for this 1) it’s so young, 2) it doesn’t interact with third parties like email and 3) Systems like Facebook won’t offer such controls. Email must interact with many unrelated parties along the way to get your email to an inbox. Social marketing has a captive audience inside a single platform operated by a single company, whether inside of Twitter’s network or Facebook’s network or whomever.

This means that while email marketers must comply with laws, technical standards, best practices and other data collection and use controls, sites like Facebook face far fewer data handling laws. This means that your data is effectively open to the highest bidder. Yes, Facebook claims to have taken strides to help protect and safeguard your personal data, but you don’t know if that’s true or not. No one audits Facebook to make sure these claims are, in fact, true.

With email marketing, it’s crystal clear when a customer uses an inappropriately collected list. With Facebook, there is no way to know whether your data has been appropriately or inappropriately used because Facebook gets to make the rules. Rules that can change one day to the next.

I’ve worked for enough high tech companies to know that most companies create lot of security and data privacy theater in place of actual mechanisms. Meaning, they state in their policies that they do something, but the technological measures to back up those policies don’t always exist. This facade, otherwise known as “theater”, is what let’s companies get away with policy breaches unaware. It’s usually driven by a case of “Easier said than done”. Implementing technical measures to enforce a policy isn’t always easy, particularly if said data is terabytes in size. Instead, companies perform it on a case-by-case basis. It also might take them weeks to complete the task. The policy is may be written into the legal terms and conditions. However, when a customer actually wants to know if that policy is enforced, the company will then manually enforces that policy on that person’s data, assuming they even give you an honest response to your question.

You’d be surprised to find that this situation happens a lot more often than you might be aware. Even many legal teams are unaware of this situation in their own companies. They think that what’s in the policy is always carried out every time. In fact, that’s not true much of the time. This is simply because legal teams rarely carry out internal audits to ensure that written, published policies are being followed internally. Even then, some legal teams are both aware and complicit in allowing the technical teams to not follow the policies to the letter.

I would also be remiss by not mentioning that some legal teams write data policies without informing the necessary internal teams of the policy changes or additions. Without buy-in and support from the appropriate technical teams, the written word can’t always be translated into functional technical procedures. This means that the legal team is out of step with what is technically feasible. Legal teams should always propose and write policy in conjunction with the teams that must support those policies. As a lawyer on an in-house legal team, you can’t just write policy because it sounds good and then assume it can be implemented easily. That doesn’t always work. Hence, security theater.

Data Deletion and Right to be Forgotten Laws

Here’s the outcome of security and data privacy theater. If you request a company to delete your data, you won’t know if your data has been irrevocably deleted. Many companies hang onto long term backups for exceedingly long periods of time. This means that while your personal data may no longer exist on a live hard drive and may not longer be visible via a web interface, it could still exist on a long term data backup solution the company uses. It might even exist via an API system. Note that some data backup solutions exist on live disks, such as using the Cassandra or Elastic database system or even such reporting systems like Splunk or Elastic’s ELK. Some of these internal systems may never or rarely get purged. Even basic text log files, which may contain some or all of your personal data, may be retained for years due to Sarbanes Oxley and other data retention requirements.

Early in the life of email marketing, you might not expect to be unsubscribed. Today, laws require email marketers to remove your email address from their list within 10 days. The word remove is subjective. The actual term is unsubscribe. Even after unsubscribing, the company can continue to hold onto your email address in their database so long as they never email you. In fact, an opt-out request is simply to unsubscribe you from their mailings. It doesn’t ensure your email address will be deleted from their list. This is how your email address can accidentally be mailed again in the future despite a previous opt-out request.

Data deletion has no laws in effect in the US. US companies are not obligated to delete your data even if you so request it. They can leave it on systems within their organization. This, unfortunately, leaves your information vulnerable to data breaches by unauthorized persons. This is why you can request a company to delete your data and later find out your data was involved in a data breach years later. Or, you may find identity theft from a data breach where you had asked a company to delete your data. There are no laws that require companies to delete data when requested… at least, not in the United States. In the UK and EU, the right to be forgotten laws have been written and will apply to UK and EU citizens under the GDPR. Whether those laws continue to exist after Brexit in the UK, I’m unsure. Canada appears to be working towards (or has enacted) a similar data purge law for its citizens.

However, no such ‘right to erasure / right to be forgotten’ law has been enacted in the US. Companies in the US are still free to store and keep your personal data for as long as they see fit. Yes, even after your deletion request. This means that your data is still at risk of a data breach, even after you’ve requested Facebook, Snapchat, Whatsapp, Instagram, YouTube, Google or Twitter to delete your data. US companies are just not obligated to irretrievably delete your data. Even in the EU, the laws may not fully protect you from irrevocable deletion of your data. Meaning, it may be enough for a company to actively delete visibility of your data on their web site, but that doesn’t ensure irrevocable erasure from all media in that company’s possession. Worse, as long as that data never surfaces in the future, that company can hold onto it… even if they are considered ‘breaking laws’. The only way to make sure irrevocable deletion occurs is by adding incredibly stiff penalties when the laws are willfully broken.

Social Networks and Marketing

Facebook, Twitter, Instagram, Whatsapp and more bank on their ability to collect your data, store it and use it freely. As long as you digitally agree to their terms and conditions regarding their data collection and use, then you have little recourse against them when a situation like Cambridge Analytica occurs.

In email marketing, selling of lists has been taboo for years and has always been considered an email marketing dubious practice. In fact, list purchasing is considered one of the worst email marketing practices. In Social Marketing, no such rules have been laid down. Facebook has been hitting these walls one-by-one since at least 2008. Each time, they put up yet another road block to stop that particular practice (aka, baby steps). Facebook doesn’t want to stop these practices, they’re just forced to by public outcry, the media and the government each and every time.

They knee-jerk by enacting new policies each time, but only because of duress. Policies, I might add that email marketers have been adhering to for years. Policies that now have laws like the CAN-SPAM Act and individual state laws. Yet, here we are again, reliving this same abuse pattern over again in another form.

Marketing Today

Marketers have always wanted to do the least work possible and gain the most money from their efforts. That’s the whole reason email marketing exists. That’s the reason advertising exists. They want to create the most effective campaign and Facebook allows them to do this with their personalized marketing.

Cambridge Analytica took that one step further. They mined Facebook’s data and stored it in their own offsite database. A database that Facebook claims they thought had been deleted. They then combined that data with other data to create an even more comprehensive profile of each person. Yes, even more comprehensive than Facebook alone. If they had first and last name along with at least one piece of identifying information, they could have gone to LexisNexis and gotten even more identifying information. Who knows, they might have?

Marketers today are looking for the easiest way to target ads to the people they need. Hence, the reason Cambridge Analytica can even exist as an organization. There are many, many data brokerage services available to buy list and user data. Data that can be populated into databases and targeted with ads. Most of these outside brokerage services sell with the intent of using email marketing, but there may be more today that are using Facebook to present their ads. Cambridge Analytica is but one in many data brokerage services that exist on the Internet. You can bet many others also exist and may have taken advantage of Facebook’s situation, just the same as Cambridge Analytica.

That Facebook claimed to believed that a data brokerage service, whose sole business is in selling data, would ever delete data they had legitimately collected from Facebook is entirely naïve and disingenuous. Facebook had to have known the business Cambridge Analytica was in at the time they were extracting data from the platform. One only needs to visit Cambridge Analytica’s web site for a few minutes to understand their line of work. Even then, if you weren’t certain, you could certainly pick up the phone, call them and ask what it is they do. Companies are always eager to talk about their line of business, particularly if they think they’re about to make a sale.

Ad targeting is not going away and is only likely to grow as artificial intelligence systems grow. The data privacy issue will continue to be ever more important as time goes on. To protect yourself, you must ask yourself, what should I share and what should I not? For example, publishing a single cute puppy or kitty photo or video is probably fine. However, many cameras today also add EXIF data to store location data and possibly other information about where and when photo or video was created. Data that might be used to link you to that photo. However, taking a photo every day of your cup of coffee might reveal things about the location that you visit (names, people, location identifiers, etc). These are things when you need to be cautious before posting. Even if the photo appears innocuous, you might want to think twice because someone else might see something that you don’t see.

Social platforms, while fun, are big business for their owners. Don’t be fooled into thinking it’s all fun and games. Those games and fun have a price to pay. That price is what they get to do with your user data. As has been said, if the service is free, you are the product… or more specifically, your data.

Consumer Tips: How to navigate the Toys R Us liquidation

Posted in best practices, business by commorancy on April 1, 2018

If you’re thinking of visiting Toys R Us to take advantage of the store closing liquidation sales, this is your safety guide. Don’t throw your money away at Toys R Us, make every dollar count. Let’s explore.

Giving Gifts

Toys R Us’s liquidation is All Sales Final. The first tip is pretty straightforward. If you’re looking to buy a gift for a child, you are trying to stock up for the holidays or for any other rainy day reason, keep in mind that you cannot return, exchange or refund anything you purchase at this time. For gifts, this can be critical, particularly with children. You should always make sure that the person who receives that gift can return or exchange it if they don’t like it. Purchasing from Toys R Us on liquidation, you forfeit the return option.

Even if the gift is to be given while Toys R Us is still open, there are no refunds or exchanges. So, be aware that whatever gift item you choose is theirs to keep forever. You might want to be prepared to perform an exchange with your own money. Note that this can become an uncomfortable situation.

If you know there’s a possibility that your gift might be returned, you should buy from Amazon, Target or Walmart instead which leaves that option open for the recipient.

No Returns, Refunds or Exchanges

This goes hand-in-hand with All Sales Final. If you purchase items from Toys R Us during liquidation, you may get a great deal, but at the cost of no refunds, returns or exchanges. Make absolutely certain that what you buy is absolutely something you intend to keep.

Whether or not you intend to give the item as a gift, you should open the item and check it thoroughly. Do it in the store if at all possible. If it has batteries, make sure to test the item for functionality. You may not be able to test a battery powered item in the store, however. They may not allow you to remove the item from its packaging in the store to perform this test. You may have to take it home and check it there. By that time, you’ve already purchased and it’s too late if it’s defective. If you’re in doubt, leave it at the store.

If you do find a dead or defective item, you will need to contact the toy manufacturer directly and work your exchange through the manufacturer. Keep your receipt. This exchange process could take a whole lot more time than if you bought at a store still accepting exchanges.

Consider your purchases during a liquidation carefully. Do not purchase Toys R Us gift cards… but this should go without saying.

Extended Warranties

If you decide to buy an expensive item that could break easily, you should ask of Toys R Us to offer you a SquareTrade warranty plan. This will ensure you can get a replacement after Toys R Us closes. In preparation for this article, I spoke with a representative at SquareTrade who confirmed that they will continue to honor all SquareTrade warranties purchased at Toys R Us. If you do decide to invest in an expensive item that is prone to defects or breakage, you should also consider purchasing a SquareTrade warranty during liquidation.

Video Games and Video Game Consoles

Purchased video game content is a reasonably safe investment during the Toys R Us liquidation. It’s rare that a disc or a cartridge is defective.

On the other hand, purchasing a video game console or other video game hardware is a bad idea. If you must purchase one, purchase a SquareTrade warranty at Toys R Us to go with it (assuming they are still selling these warranty plans). If it’s not SquareTrade, then you should call the plan service provider before you check out at the store to ensure that insurance plan will continue to cover your purchase after Toys R Us closes for good.

Without an extended service plan, you have no replacement policy if it’s defective or gets broken. Be very cautious of buying video game hardware from Toys R Us during liquidation without a warranty. Though, you can try to work through the manufacturer warranty, it’s sometimes only 90s days. During liquidation, this is the one time where you should consider the purchase of a third party warranty, at least for purchases like video game consoles… particularly the Nintendo Switch which is portable and prone to being dropped.

However, certain types of lesser expensive video game hardware, like controllers, wires, Amiibo, cases, pens and other similar $30-$50 items are safer to buy, particularly when they are marked down 50% or more. However, consoles themselves, like the Nintendo Switch, Xbox One X and PlayStation 4 are not considered good investments from a liquidation sale.

I’d also suggest to avoid buying these devices from eBay as well because many will flood eBay listings from sellers who went to Toys R Us just to cash in on these low prices. If you’re thinking of buying a console from eBay, ask where it was purchased. Be wary if it’s from Toys R Us.

Dolls, Action Figures and Non-Battery Toys

Toys that don’t require batteries and don’t have complex moving pieces are some of the safer items to buy. They offer less defects and are more likely to last the test of time than RC vehicles, video game consoles, battery powered electric child cars, electric skate boards and other custom battery items.

Consumer Safety and Toy Recalls

Toys R Us was very good at keeping up with safety recalls. Unfortunately, they are going out of business. This also means that any toys you purchase during the liquidation that later fall under a recall, you can no longer return to Toys R Us. Like the All Sales Final discussion above, consider that items like cribs, baby items and other possible dangerous infant and toddler toys won’t have any place to go if they are recalled, especially if your baby gets hurt. Though, the manufacturer might honor a return or exchange, you will not be able to do so at Toys R Us. You will also not be able to make any legal claims of injury to Toys R Us once they have closed.

Safe or Unsafe Investment?

Here is a list (not exhaustive) of items that I consider safe, somewhat safe and not safe for a liquidation purchase so long as you fully understand that you cannot return or exchange them at TRU.

Note, safe, somewhat safe and not safe represent what I consider as a “safe purchase” (i.e., getting value for your money vs. throwing your money away), these labels do not describe whether the toy or item itself is safe for use by a child. You will have to determine toy safety yourself.
 

Toy Type Liquidation Safe Purchase? Contains Battery? Reason
Dolls Safe No
Motorized Dolls Not Safe Yes Prone to defects and can be unsafe
No store warranty
Bicycles Somewhat Unsafe Depends If you’re buying for a gift, unsafe.
If you’re buying to use now, perhaps.
If it has a battery, unsafe.
TRU may or may not offer assembly.
Use your best judgement.
Motorized Electric Kid Cars Not Safe Yes Batteries can be defective
May not be able to find replacement battery
No store warranty
Action Figures Safe No
Plush Animals Somewhat Safe No Depending on what it’s made from,
it may be safe or unsafe. Choose carefully.
Vinyl Figures Safe No
Hot Wheels Safe No So long as the Hot Wheels contain no batteries
Lego Safe No So long as the Legos contain no batteries
Motorized Toys Not Safe Yes Avoid motorized or electronic toys
Video Games Safe No Games themselves are rarely defective
Video Game Consoles Not Safe Maybe Could be defective
No way to exchange
No store warranty
Choose 3rd party insurance plan if you must buy
Video Game Controllers Somewhat Safe Yes Typically okay along with certain accessories.
Barbie Safe Depends If the Barbie doesn’t contain a battery,
this should be safe. If it contains a battery,
make sure the doll is working before
leaving the store.
Baby Toys Depends Depends For safety reasons, I do not recommend buying
baby toys and items via liquidation sales.
Diapers Safe No
Cribs Not Safe No Cribs can be dangerous for infants.
Purchase at a store where you can return.
Car Seats Not Safe No Car Seats can be dangerous for infants.
Purchase at a store where you can return.
Skateboards Safe No
Electric Skateboards Not Safe Yes  Avoid because of custom battery (replacement)
RC Vehicles Not Safe Yes  Avoid because of custom battery (replacement)
Tablets Somewhat Safe Yes  If Apple, you can rely on Apple. If another brand, avoid.
Wrapping Paper / Party Safe No
DVDs and Blu-ray Safe No
Toys To Life (Amiibo) Safe No
Headphones Not Safe Depends  High chances for problems
Toys R Us Exclusives Somewhat Safe Depends Avoid with custom batteries
Wooden Toys Somewhat Safe Depends

 
Use Your Best Judgement

The above is not an exhaustive list, so always use your best judgement if it’s not listed here. If the toy contains no battery at all, it should be fine. If the toy contains or uses standard AA, AAA, C, D or button cell batteries, you’re fine. If the toy contains a lithium ion and/or custom battery, you should avoid purchase. Any toy that contains a custom battery may have been custom made for Toys R Us. This means you may find it difficult or impossible to find batteries later. House brand or Toys R Us exclusive toys requiring refill packs should be avoided. Toys and products for infants should be avoided for safety reasons. The only product I would suggest is safe for an infant is diapers and possibly formula as long as it’s a name brand, not a house brand.

Tablets and electronics should be avoided if not from Apple or another recognized brand. If it’s a house branded electronic item, avoid.

Toys R Us Exclusives

Toys R Us Exclusives are now considered rare. However, that doesn’t mean they’re a good investment. Pop figures are fine, exclusive Barbies are fine and exclusive Hot Wheels are fine (see the list above). However, any exclusives that require something that you can only get at Toys R Us (like batteries or refills), you should avoid purchase.

Toys R Us Geoffrey toys

These are likely to be some of the rarest toys available. If you want a piece of memorabilia to commemorate Toys R Us, you should head over fast and pickup whatever Geoffrey items you can find. If you’re looking for plush, you might have to ask at the service desk.

Happy Deals and good luck!

↩︎

Can Tesla survive?

Posted in business, california by commorancy on March 28, 2018

Investors have been overly exuberant about Telsa. By that I mean, because Tesla set up shop in Silicon Valley rather than Detroit, many investors see Tesla as a ‘tech company’. Folks outside the Bay Area, however, see Tesla as a car company. Let’s explore.

Car Company vs Tech Company

For whatever reason, too many people see Tesla as a tech startup. The fact is, Tesla is in no way a tech startup. It is a car company. Tesla has, so far, provided no new tech to the world. Cars, in fact, are not in any way new technology. Worse, there’s nothing new about Tesla’s cars that have not been done before. The only claim to fame that Tesla has is its partnership with the Lotus design team to design and help produce the Tesla Roadster. If the Roadster looks amazingly like a Lotus Elise, now you know why. But, paying for someone else to design your vehicle’s interior and exterior isn’t innovative, it just means you have money.

Let’s also consider even though Tesla decided to go electric in its vehicles early on, it is by no means the first electric vehicle to market. Tesla’s decision wasn’t without a significant amount of peril or adversity, adversity that continues to this day. For example, gas powered cars have huge infrastructure around the globe to buy fuel. In 5-8 minutes, you’re fueled up and ready to go again for hundreds of miles on a single tank. Unfortunately, charging electric vehicle batteries is a laboriously slow process by comparison. Sure, even with a Tesla Supercharger, you’re still stuck charging your vehicle for at least 30 minutes to get a 65% charge (about 170 miles). If you want a 100% charge, you’ll be there a whole lot longer. If it’s not a Supercharger, then plan to spend a whole lot more time there.

If the 30 or so minutes you must wait is at a time when it’s convenient (i.e., you’re stopping for dinner anyway), then that’s great. If it happens to be when you’re pressed for time, you’re not going to be a happy camper. If you don’t plan your trip properly or if you get tripped up by construction, you may find yourself off course without a charging station handy. Then where are you?

So far, all of the things I’ve mentioned above have nothing to do with tech and everything to do with usability. Specifically, car usability. More specifically, car usability with regards to electric vehicles which charge slowly and offer very little nationwide infrastructure. This is the adversity that Tesla is up against.

Pushing Boulders Uphill

Tesla has a long way to go before the US has electric infrastructure at a saturation where electric cars can even come close to replacing gas powered cars. That’s not to say it can’t happen sometime in the future, but Tesla is pretty much alone in this and has given up several times along the way. Yes, Nissan, Toyota, Mini and Chevy have all introduced electric vehicles, but they are the outliers. They aren’t pushing for nationwide charging coverage. These vehicles have not yet become the bread-and-butter vehicles that keep these brands afloat. Every car manufacturer, other than Tesla, sells gas powered vehicles. With Tesla’s electric-only approach, it is sink or swim… and currently, Tesla is pretty much just treading water. Tesla hasn’t even tried hedging its bets by producing an alternative fuel assist hybrid to augment its slow recharge times and offer a vehicle with much longer distance. In fact, by not embracing such a strategy seems to be terribly remiss on their part.

For Tesla, this should be considered self-imposed adversity. Why not invest in producing a car that accepts natural gas, gasoline, alcohol or even hydrogen? I think we’ve already seen that Tesla has pretty much pushed the limits of its electric vehicle paradigm as far as it can go.

Expensive Bells and Whistles

I can hear the throngs of Tesla owners now… groaning at this article. Wake up! You bought a $100k commuter car. Sure, it has that nice 17″ (now dated) display in the middle of the dash and a few interior niceties, but it’s a car. A car is a car is a car. It takes you from point A to point B. Does it matter what bells and whistles it offers inside? You’re not buying the functionality of the technology, you’re buying the functionality of the car. Worse, it’s not that this technology hasn’t already existed in a car before Tesla and it will definitely exist in many cars in the future. Just look at the Prius. It’s not 17″, but it definitely had an in-dash display from the beginning.

Don’t be fooled by the Silicon Valley hype. Tesla isn’t a tech company, it is a car company. They don’t offer innovative technical solutions or innovative technical products. They offer a car (or rather, many models of cars). A car, I might add, that is from a brand that has yet to prove itself as a long term car brand. Let’s take the Saturn car brand as a prime example. When Saturn came about, its claim to fame was all of the hand-holding and attention they gave new car owners. Where is Saturn now? Dead. The company ceased producing cars in 2009 and closed its doors in 2010. Its sales model wasn’t sustainable. Its cars were mediocre.

Can Tesla Survive?

Is Tesla’s model sustainable? That depends on Elon Musk. Once Elon finally admits to himself, his employees and the rest of the world that Tesla is, in fact, a car company and not a tech company, he will be able to realize what he needs to do to take Tesla to the next level. The problem right now is that many investors in Tesla see them as a tech stock, not a car company. Tesla is not a tech stock. Let me repeat that. Tesla IS NOT a tech stock. Don’t fool yourself that Tesla is anything other than a car company, like any company out of Detroit or Japan or anywhere else in the world where car manufacturing exists.

Fundamentally, Tesla has been battling the infrastructure issue. Elon simply hasn’t been able to gain any substantial traction for Tesla’s electric plan throughout the continental United States. Sure, there are Tesla Supercharges in select areas, areas requiring you to plan your trip well in advance to ensure you can find chargers all along the way. If you find yourself off the Supercharger path, you could literally end up stranded in the middle of nowhere with no way to get a charge. If your car happens to break down, then what? Better have AAA with its longest distance towing option as you might find yourself sitting in the cab of a tow truck being hauled to the next Supercharger station.

Infrastructure has not been a friend at all to Tesla. Let’s understand a little better why. Electric cars, while they are clean vehicles, are not clean on the environment. Instead of pushing the pollution out of the tailpipe, it is now being pushed out of the exhaust stacks at electric generation facilities. Tesla (and other electric car makers) need to understand that the pollution doesn’t stop, it just moves to a different location. If California’s electricity were produced from 100% clean, renewable resources, I’d be writing something different here (at least for California). Instead, that’s a pipe dream. California still receives much of its electric generation from fossil fuels which is used to charge up a Tesla (or any electric plugin vehicle), less than ideal for pollution. This is why the government hasn’t hopped on board with bringing electric infrastructure to the forefront. On top of that, there’s no incentive from gasoline producers to push this agenda. So, where would those incentives come from? The government (and ultimately, all of us via our tax dollars). I don’t want to have to pay to build a huge electric infrastructure raising my taxes.

Tesla’s Failures

Ultimately, Tesla had planned to introduce a battery swap program to help reduce charge times. However, Tesla had to admit that this was a failed pipe dream. They were forced to drop the idea entirely. This is where Tesla made is first and most important mistake. Apple releases products that it feels are good for users. They don’t care if people like or dislike them. That was Jobs’ MO. He decided on behalf if the public what we should like. If you didn’t personally like it, you went someplace else. Tesla should have introduced the battery swap option in spite of the complaints, costs or problems. Push the idea out regardless. Drive the market to adopt the idea instead of caving into market pressures. This is where Elon completely differs from Jobs and Apple. Though, Jobs was arguably a marketing visionary. Elon is, at best, a huckster. There is literally nothing visionary at all about the Tesla cars being produced. Modern yes, visionary no.

Once you understand the difference between the words “modern” and “visionary”, you’ll quickly understand that what makes a Tesla vehicle attractive is its amenities. These same types of amenities are those that drive the sales of Lotus, Lamborghini, Maserati, Bentley, Cadillac, Mercedes Benz and even Lexus… i.e., luxury car brands. Tesla is less about being an electric vehicle and more about becoming a luxury car brand. Luxury is why you buy Tesla. That’s why you buy any type of luxury car. Again, don’t kid yourself. It’s not the technology, it’s the luxury. Luxury, I might add, that comes with a fairly steep price (both monetarily and time wise). Yes, it costs around $60k-$100k, but that’s not the half of it. You also spend a fair amount of time not even being able to use the vehicle because it’s hooked to the charger. With a gas powered vehicle, its downtime is measured in minutes. With Tesla, its downtime is measured in hours. When I say downtime, I’m strictly talking about the time it takes to ‘refuel’ it, not mechanical breakdowns which are a whole different bag.

Since most people don’t have Superchargers available at their homes, they are subject to longer charge cycles. This means you need to plan for this. Don’t come home on low charge and forget to charge it. You’ll be in a world of hurt the following day when you need to get to work. Tesla is a car brand that isn’t completely worry free. You must take the time to plan your day and when to charge. If you forget even once, you’re going to be late for work.

Tesla as a Commuter Car

Considering all of the above and the ~256 mile range on a charge makes Tesla not ideal for long distance travel, at least not without proper trip planning. It’s a great about-town car, but for long distance travel, I’d suggest owning a vehicle with a gas charger. A gas charger vehicle means you can stop at any gas station to refuel the power generator. Our alternative fuel infrastructure may not be optimal today, but it is the infrastructure we are stuck with for the moment. Trying to find alternative fuels like propane, hydrogen or natural gas could leave you just as stranded as electric alone. With a gas car, you can travel anywhere there is a gas station and refuel in minutes. This infrastructure is far and wide and everywhere.

Ultimately, this lack of electric infrastructure relegates Tesla vehicles to commuter cars as their best use case. For me, justifying spending $60-100k for a commuter car is way too much. Consider that for those of us who also live in apartment complexes means leaving our expensive Tesla vehicles sitting idle on dark parking lots to fully charge, then walking away. Not ideal. You pretty much have to own a home and install a Tesla specific charger to get decent charge times and know your car is safe. It’s also fairly inconvenient leaving your car sitting on a parking lot for several hours only to have to go back when it’s done and pick it up.

Many apartment complexes are way behind the times, but they are not the exception. Let’s consider the infrastructure that Tesla has built since the first Roadster was introduced. Let’s just say, it’s not much. It’s better than it was, but it is no where near where it should have been at this point. This is there reason Tesla will fail unless they change their ideas and embrace the fact that they are not only car company, but a luxury car company. This is the reason other car companies will do better than Tesla with their everyday electric vehicles. Tesla is a luxury brand that only families of a certain affluence can afford.  Vehicles like the Nissan Leaf and the Chevy Volt are the everyday electric cards. These are vehicles that are both affordable and offer better value for the money than Tesla’s short distance expensive luxury vehicle.

Oh, but the Model X has gull wings you say? Really, that’s something you’re going to argue? Ok, let’s argue it. If you have kids, these doors are entirely unsafe for little fingers. Sure, Tesla may claim safety features, but do you really trust your kid’s little fingers against an electric door closing mechanism? Go ahead, I dare you.

Safety Track Record

Tesla is a fairly new car company founded in 2003. It never produced cars before 2006. Its first vehicle is the Tesla Roadster. Tesla has had difficulties keeping up with demand for the Roadster. Its first commercially successful vehicle was the Model S introduced in 2008, Tesla’s second model vehicle. Other models have since followed. And yes, I realize the ~$33,000 Model 3 is on the way… but they’re having production problems with this model. It could be years before you see your preorder.

Basically, what Tesla is making is all new without the benefit of years of manufacturing experience. This means that testing safety features in its vehicles may not be a top priority. Let’s consider the safety of lithium-ion batteries when in a crash. Actually, let’s scale that back a little. Just by poking a hole into your cell phone’s lithium-ion battery will cause noxious fumes, possible fire and/or explosion. Let’s scale that up to electric cars. If the battery in your Tesla is compromised due to an accident, you could easily find your car on fire, electrocuted or in an explosion. While this is not exclusive to Tesla’s electric cars, the size of Tesla’s batteries could make them particularly unsafe. It could also mean that if you’re injured in a Tesla, first responders may need to secure their own personal safety against your vehicle’s battery before using the jaws-of-life to extract you from the vehicle. This precious time lost could mean the difference between life or death.

You’re exposing your family’s safety to Tesla each and every day you drive it. Ford, Chevy, GM and even Toyota are brands that have existed for decades. These companies fully understand the concept of proper safety design and of recalls, lawsuits and defects. Unfortunately, Tesla has only had just a few years to gain this knowledge. Yes, they have hired seasoned industry vets to help get their vehicles to be their safest quickly, but the question isn’t what they added, but what they missed. They’re a new car company with new growing pains. Sure, you can hire expertise, but can you be sure of what you missed? Who really knows? Tesla has been relatively lucky that they have not yet seen an egregious safety failure on all of their vehicles. The question is, have they done it right or have they been lucky or it is just a matter of time?

Worse, could Tesla survive such an huge safety recall in all of their vehicles? Who really knows? Sure, their company is highly valuated, but that doesn’t mean they have the cash to support a massive lawsuit or an expensive recall. Ultimately, when you buy into Tesla, you’re buying into all of this. You should think long and hard about whether this is the car for you. Don’t buy it because it drives nice or because the seats are comfortable or because dashboard looks cool, buy it because it makes the most sense for your budget, the way you intend to use it and your family’s safety.

Can Tesla survive? This depends on whether they can truly get beyond their ‘tech company’ mentality. Tesla is a car company. At some point, they’ll have to admit this. Once they admit this, then they can truly begin to take their cars to the next level. If not, then perhaps Tesla is just a flash in the carburetor.

Toys R Us: Say Goodbye to an Era

Posted in botch, business, tanking by commorancy on March 14, 2018

tru-logoFor many, we grew up with Toys Я Us as the go to place to find that cool new toy, game, doll, action figure, Teddy Ruxpin, train set, learning toy, crayons, movie or even video games. Times are a changin’ folks and Toys R Us is now finds itself way less than one Barbie away from permanent closure. Let’s explore.

Update from the News Desk — 2018-03-14

Toys R Us headquarters has apparently informed all US and UK employees on Wednesday, March 14th that all US and UK locations would be closed, a move that would lose 33,000 jobs. This would be one of the biggest retailer liquidations. CEO David Brandon intended to file paperwork to begin the liquidation proceedings on Wednesday.

From small to BIG to defunct

In the 70s, I remember toy stores primarily consisting of smaller retailers in malls, usually carrying Lincoln logs, wooden toys or learning toys. While I didn’t mind visiting these places, they felt more like a library than a toy store. They also didn’t carry much of the things that I liked. It wouldn’t be until sometime the mid-70s when a Toy R Us opened near my house. That’s when toy shopping all changed, at least for me.

I’m sure my parents hated taking me to Toys R Us,  just as so many parents do. For us kids, it was like a day at Disneyland: a gold mine, a treasure trove, a place of dreams. Unfortunately, the parents were having none of it… or at least, as little as they could walk out of the store carrying. Good on them, but that didn’t make Toys R Us any less magical to a 8-10 year old. We loved it, we loved going there and we especially loved it when we got to take something home with us.

Geoffrey

I was never a super big giraffe fan, but Geoffrey was a fun and charming mascot constantly pointing out cool new things in the store. I would come to see Geoffrey as cute mascot designed to help me find new stuff. Not always, but a good bit of the time. Sometimes he was just present, like Mickey Mouse. That Giraffe always made me smile because I knew that I was at that magical place, like Disneyland but local. Over the years, Geoffrey began being used less and less by TRU, but he’s still considered their mascot.

Every once in a while, Toys R Us would offer an enter-to-win a fill-your-cart shopping spree. I always wanted to win one of those as a child, but alas never did. To think what I would have filled my cart with. The mind boggles, if only because some of those toys are considered highly collectible today. Though, those toys most assuredly would not have remained closed in their packaging after making their way home.

Growing Up

As I grew into my 20s, got my own car and job, my relationship with Toys R Us changed. No longer was it that magical place, but it now had firmly become a store and I was a consumer. Still, it was a place to go to find that hot new toy that everyone’s talking about. It also became the place to find computers and video games. If I couldn’t find it at Target or Kmart or, later, Walmart, I could almost certainly find it at Toys R Us or Kaybee or Children’s Palace (competitors at the time) and to a much lesser degree FAO Schwarz. Toys R Us was always the first place to go, then the others as they were less reliable.

Dominoes

As the competitors fell over one at a time, first Children’s Palace in 90s, FAO Schwarz in early 00s, then in the middle 00’s, Kaybee Toys, Toys R Us was still standing and, in 2009 would acquire the FAO Schwarz brand, but would sell it off in 2014. It was (and currently is) the place to go to find all things toys. Unlike Target and Walmart that choose to stock limited toy items, Toys R Us (like the previous Children’s Palance and Kaybee) still carries aisle after aisle of wide ranging toys you can only find at Toys R Us. You simply can’t find this selection of toy items at a discount department store. This is why I always ended up at Toys R Us in search of fun, exciting new things.

The Mistakes

Throughout the later years, I’ve grown a love-hate relationship with the Toys R Us chain. Not only because I worked there for a short time while in my 20s, but also because the management does a lot of things that don’t make sense. For example, Babies R Us. For a time, Toys R Us stores devoted half of their space to baby goods. I don’t have a baby, so there’s no interest in that. Yet, Toys R Us decided to kill half of their store space to devote to these products. This meant, less space for toys, games and other items.

I understand that the management wanted to expand their selection into babyland, but it was a mistake to take away valuable Toys R Us aisle space to devote to all-things-baby. This, in my opinion, was one of the biggest mistakes the Toys R Us management foisted upon its stores. That was, until they finally spun Babies R Us into its own stores and gave it its own space.

Later, the management decided to do away with separate Babies R Us stores and chose to abut the two stores together for one seamless one-store experience. That was at least better than taking away shelf space from an already cramped toy store, but even that was unnecessary and, in my opinion, a mistake. They can be next to each other, but walled off and separate stores with separate stock and separate staff. I know why they did chose to hook them together. They did it so they could use one set of checkout lanes, one set of cashiers and one set of staff to stock both stores.

The X

At around the time that Babies R Us was coming into its own as a separate store chain, Toys R Us decided to change its shelving layout. Instead of the more logical long rows running from the front to the back of the store (with middle store aisle breaks) which made it easy to find everything, the store layout designer decided to change the aisles to be side to side and then create X shaped rows in the middle of the store. Not only were these rows much harder to navigate, the layout of the aisles were crippled as a result. This layout made finding things incredibly hard and it seemed like they had less shelf space.

Not only was everything now moved around haphazardly, it made finding what you’re looking for overly hard. Meaning, now you had to navigate the whole store looking at everything just to find that thing.

Maybe the designers thought this was a good idea? It wasn’t. This is the second mistake from Toys R Us management.

Overbuying and Stocking the Wrong Toys

I don’t know how many times I visited Toys R Us in the 90s only to find the same toys every time I visited, sometimes months apart. These we affectionately call peg warmers. This mistake continues to plague Toys R Us to this day. Not only did Toys R Us have incredible buying power way back when, they just didn’t use it to their advantage. Instead, they would continually overbuy on dud toys and not buy enough on the hot toys.

You can’t sell toys that you don’t have in stock. For example, Cabbage Patch kids. When that craze hit, they couldn’t keep them on the shelves. You’d think Toys R Us could have negotiated with the manufacturer and buy 10x the amount they originally bought… simply so they could fill the demand. Sure, there might be a drought while the manufacturer created more, but eventually they would have enough stock quickly to satisfy demand. Alas, they didn’t and the shelves remained bare until the toys were so cold you couldn’t even give them away. Too little, too late.

Further, Toys R Us needed to let the local managers order stock for their specific location to stock toys that are regionally hot. Not every toy sells the same in every store, yet Toys R Us felt the need to send cookie cutter stock out to every single store. If you walked into a Toys R Us in any state, you’d see identical stock. Each store manager needed to be given free reign to specifically order stock in sizes that made sense for amount of local demand they were seeing for a given toy item. If they couldn’t keep a specific skateboard stocked, then the manager should be able to order the proper amount to cover the local demand from their store. In fact, stores that couldn’t sell the item should have shuffled the stock over to stores where the demand was high. That’s smart inventory management. Nope.

Store managers should also be able to nix slow selling items from their shelves and replace it more hit items. Why continue to carry that obscure toy that you can’t even clearance out when you can sell 100x as many Tickle Me Elmos? Having great selection is fine as long as you’re not stocking 50 of an item you can’t even give away. Again, smart inventory management people. Stock them in small quantities, sure, but not in the quantities that each store was getting. Shuffle extra stock to other stores that have none. Remember, I worked there, I saw the stock amounts in the stock room.

Nope. Toys R Us continued to make this mistake year after year.

Over-expansion

Nearly every business thinks they should open as many stores as physically possible. But, you can’t do this when most of your stores are operating in the RED. Toys R Us was no exception. This chain continually felt the need to open new stores rather than trying to shore up their existing stores and get them each to an individually profitable status. If the management had stopped their expansion plans and, instead, focused their efforts on making each store profitable by the end of Q1 each year, Toys R Us would not be in this predicament.

Dated Store Displays

Not too long ago (perhaps early 00s), Toys R Us did away with the X aisle layout and converted them back into horizontal rows once again. However, the aisles now run left to right in-store rather than the original front to back design (which was arguably its best floor plan). Unfortunately, their fixtures are all incredibly dated pegboard and 70s style metal fixtures. They look like they’re straight out of a 70s store… even when the store is brand new. Maybe these are the cheapest fixtures they can buy? No idea, but they don’t look modern.

The store is also incredibly jam packed with stuff. The shelves are always full of stock yes, but it doesn’t help when the stock is old and is sitting on dated shelving units lit by 70s style fluorescent lighting fixtures.

The Business

Here’s Toys R Us’s primary operational problem and the problem that ultimately leads to where we are today. Toys R Us always relied on the holiday shopping season to pull its stores into the black. Meaning, Toys R Us always operated its stores in the RED through 80-90% of the year hoping for the holiday season to pull each store up and out and operate in the black for that year. This was the chain’s primary mistake. This operating model had been ongoing since the 80s. This was the way that TRU intentionally chose to operate its stores. This was also entirely their biggest operating failure and it’s the mistake that is now what’s threatening closure and costing TRU its business.

In addition to operating in the red, Toys R Us also didn’t wield its buying power to get the best possible credit terms, the best possible deals and the best possible return arrangements. If a toy doesn’t sell, package it up, send it to another store that can sell it or send it back to the manufacturer for full or partial credit. Let the manufacturer deal with that stock rather than trying to organically clearance out items on the shelves years later. No, get these old toys off of the shelves to make way for new toys. Fill the shelves with toys that can sell and that will pay the bills.

If you can’t pay your bills, you can’t stay in business. Business 101. Yet, Toys R Us management felt that they were above these rules. The management team felt they could continually run their stores in the red without ramifications. Well, fate has now caught up with you, Toys R Us.

Being Acquired by Private Equity Firms

Because of the way Toys R Us chose to operate its stores, it could not support being acquired in this way. This acquisition was entirely shortsighted on the part of the private equity companies involved and they (and us consumers) are the ones who are now paying the ultimate price.

In 2005, Toys R Us was acquired by a set of private equity firms. These firms included KKR & Co., Bain Capital and Vornado Realty Trust in a $7.5 billion buyout deal. These three companies (and their investors) sank $1.3 billion of their own funds into the purchase, leaving the rest of the purchase price of $6.2 billion to be made up in loans. These loans saddled Toys R Us with an over $6 billion debt burden. A debt that, because of the rather nonsensical business model that the stores had been following since the 80s, could never be recouped. All of this leads to…

Bankruptcy

In late September 2017, Toy R Us filed for bankruptcy protection against its creditors. This means that its creditors can no longer go after Toys R Us for not paying bills. It also meant that the loans left over from that terrible 2005 buyout deal could no longer collect on those loans. Of course, in return for this court issued bankruptcy protection, the company has chosen Chapter 11 to work through a plan to reorganize in a way to get themselves back to profitability and pay their creditors over time before time runs out. For the Toy R Us management, that meant finding a suitor to buy the business… because, of course, they couldn’t be bothered with actually trying to restructure the stores in a way to make them profitable. Oh, no no no.. that’s just too much work.

What? Are you kidding? Are you really expecting some well funded company to swoop into this ailing business holding onto a mountain of debt and offer to buy you? Really? The way that TRU operates is textbook operating procedure for failure. It cannot continue to operate in the way that it does. Even closing half of the stores may not be enough to solve this operating problem. It’s only surprising that it took this long for this toy chain to make it to this point. I expected this day to come a lot sooner.

Toy Collectors and Toys R Us

I full well expected to see Toys R Us fail in the 90s.  However, Star Wars saw to it to keep Toys R Us in business. The Star Wars collectors came out in wild abandon to snap up tons of revamped Star Wars merchandise for not only the previous trilogy (including the Orange and Green carded Power of the Force series). These toys still remained hot even after 1983’s Return of the Jedi cooled down. It all heated up again when the Prequels began in earnst in 1999 (toys beginning to appear in stores about a year earlier). Toys R Us got a reprieve from their red ledger problems due primarily to Star Wars collectors, Hasbro and a few other unrelated hot toys during the 90s (Tickle Me Elmo). Almost every year, there was some new fad that kept Toys R Us’s year end strategy in check. Though, this strategy would ultimately fail them when, in the last 10 years or so when there just haven’t been those must-have toys or collectible Star Wars toys. Even the Zhu-Zhu pets weren’t enough. Even the latest Star Wars trilogy from Disney has not had the merchandising power that the 90s saw. Though, Disney isn’t crying over what they have sold.

In fact, I’d venture to guess that the 90s collectors have all but stopped collecting and have moved on with their lives… which put a huge crimp in the Toys R Us budget. In fact, during the collector heyday of the 90s, Toys R Us did their very level best to chase away the collectors. Much to their own chagrin, they succeeded in doing so by the mid-2000s. It also doesn’t help that collectors can now buy full cases directly from places like Entertainment Earth, which no longer meant the need to scour the pegs at Toys R Us in the wee hours of the morning. You could order cases directly from the comfort of your own home, then see them delivered to your doorstep.

Amazon and Online Shopping

Because of the power of the Internet, Amazon and eBay, it’s pretty easy to find that hot toy at more reasonable prices. Yes, Toys R Us is still a staple in the current shopping landscape. When it closes, both Amazon and Entertainment Earth will simply pick up where Toy R Us left off without missing a beat. If anything, I’d suggest that Amazon pick up the Toys R Us branding at a fire sale during liquidation and rebrand the Amazon toy section to Toys R Us. Keep the TRU brand alive, but not with all of that bloated store baggage. Then, dump the Babies R Us brand entirely. You can still sell baby things, but branded as Toys R Us.

Toys R Us Closing

As I said, I have a love-hate relationship with Toys R Us. I do enjoy visiting and seeing what’s new, but every time I walk into a store, I’m confronted with the dated shelving and decoration, the continual nagging reminder of just how careless the management is and how much of a wasted opportunity that Toys R Us had to be the become the biggest profitable toy chain in the world. Yet, they’ve failed.

If Toys R Us can manage to pull a rabbit out of a hat at the last minute and keep the lights on, I’ll be fine with that. Sadly, I think this is likely where it will all end for Toys R Us.

Gift Cards or Rewards — Use em’ or lose ’em

toys-r-us-gift-cardIf you have any remaining unused gift cards from Toys R Us, be sure to visit a store now and use them immediately. Don’t wait until after Toys R Us begins closing its stores.

Likewise, if you have any rewards points left on your rewards card, log into Toys R Us Rewards, issue certificates and use them up now. Same for Babies R Us Cashback Endless Rewards program. Otherwise, forfeit your chance to convert those points into dollars. Representatives for Toys R Us have said that they will honor gift cards, rewards points and cashback programs for 30 days. The 30 day clock likely began on Wednesday March 14th, when they filed their liquidation paperwork with the court.

I guess in an odd way, I do kind of get that shopping spree after all, and many years later. I just found that I have over 2500 points in my rewards account. That equates to a $100 shopping spree.

For my $100 in rewards points, I got a Nintendo Monopoly set, a Care Bear Grumpy Bear, Two Schliech Geoffrey branded figurines, 5 different Halo Hot Wheels, a Pit Amiibo, a Pain-Yatta Skylander, a Playmation Vision figure and two Geoffrey branded reusable shopping bags. I ended up paying $9 to cover the tax. I also bought a $5 Geoffrey gift card and immediately used it to get dock protector straps for a Nintendo Switch. I wanted the Geoffrey branded gift card as a souvenir. I’d also previously purchased the day before, two Geoffrey 18″ plush and one Geoffrey plush gift card holder, which I’ll put that used Geoffrey gift card in.

Returns and Exchanges During Liquidation

Check any purchased merchandise thoroughly for defects the same day you buy it. If there are any problems, return it the same or next day and exchange it. Don’t wait even a few days to exchange as you may not be able to find the same item. According to Toys R Us representatives, all sales are final. This means, no refunds. However, they may continue to honor exchanges for a period of time. If you’re uncertain of any of this, ask for details at the service desk before you buy.

If you’re thinking of shopping for gift items, you might want to buy elsewhere. Buying a gift for someone could mean the gift recipient can’t return or exchange the item. You don’t want to force a gift onto someone when it’s not something they want only for them to find they cannot return it.

Be that Toys R Us Kid one last time

If you grew up visiting and are as fond of Toys R Us as I am, I’d suggest for you to take a few minutes out of your day and visit your local Toys R Us to reminisce about the good ole days. Once the liquidation sales start, they’re quickly going to look like half-filled shells of a store. Note that the deadline for Toys R Us to find a buyer is early April of 2018, so visit them quick. You have less than a month.

You might even want to pick up a souvenir, such as a plush Geoffrey, to remember what was Toys R Us and what it meant to us as kids. If you want a plush Geoffrey, ask at the Customer Service desk. It seems they keep them there for some reason.

Biggest Failed Kickstarter Projects

Posted in botch, business by commorancy on March 7, 2018

Even though there have been successful projects on Kickstarter and Indiegogo, projects have also failed for a variety of reasons. Some projects are outright scams solely designed to part you from your money. Let’s explore 11 of these extreme failures.

Don’t Believe The Hype

There are many, many hucksters out there. They can be anywhere in the world from China to Silicon Valley. When you see something that seems too good to be true, it probably is. If you choose to back any projects on Kickstarter or Indiegogo, you need to be 100% prepared to lose all money you offer to back a project. Not all projects succeed and this article aptly proves that not everyone in this world is out to make good on their promises. Without further adieu, let’s dig right into the first failure…


11. Holo Cow, Batman!

The product creator H+ purported its Kickstarter Holus 3D display idea to be a unique new 3D holographic display technology. The Holus was a Kickstarter campaign in 2015 that touted lots of false claims. The idea is that the images would appear in 3D in real-time as a holograph. Unfortunately, that’s not what the pitch video shows. This Kickstarter campaign amassed CA $297,790 from 496 backers.

Let’s watch this professionally produced pitch:

What went wrong?

Note the still image on the video above. You can see the image passes beyond the edge of the pyramid corner seamlessly. This is not possible. The video uses 3D rendered imagery as an effect, not a physical working prototype which lead to false and misleading information. This is not, in any way, a holographic display. Instead, on the top of this device, there’s a flat panel LCD screen (probably cheap one) that reflects one of 4 different flat images into each side of the glass pyramid. This makes it look like the image is ‘floating in space’, but it is not in any way a 3D holographic experience. This is an entirely scammy device for how it was sold to the backers. People were roped by the hyperbole and backed this project. Suffice it to say, not everything is always as it seems on Kickstarter.

This device is not even an original idea, nor does it offer holographic imagery. Let’s also consider that you can go to Amazon and buy this less than $10 device for your phone which essentially does exactly the same thing as The Holus. There are even models of this device for less than $4 if you really want to go cheap. These display enhancing devices existed long before H+’s idea. This is definitely one that attempted to pull the wool over the eyes of the backers with false claims. There’s now even an arcade game named Crazy Tower that uses this “pseudo-holographic” technology for its display. It’s not 3D either.

Apparently, H+ is still in business trying to hawk this thing. You can visit their web site at hplustech.com. Holo promises seem to be all the rage, let’s scam on.


10. Backpackin’ To The Bank

This next failure, Backzips, was a Kickstarter project that used the take-the-money-and-run approach. This project raked in all told, over $168,000 between Kickstarter and Indiegogo backers. The idea was allegedly to create a backpack that was made of Kevlar, had USB ports, sported an up to 12,000 mAh battery pack and a zipper located in such a way so as to secure your belongings inside from prying hands behind you.

What went wrong?

Suffice it to say, the delivery date(s) came and went, then came and went again over and over. There are 1,495 backers who’ve left over 1012 backer comments on Kickstarter with no answers. November, 16, 2016 was the last time backers heard from the project’s creators. Suffice it to say, that money is not coming back.

After one KS backer later found what appeared to be the same exact bag on sale at Aliexpress, he contacted the seller to get the story. Here’s what the seller had to say:

I am a backpack distributor in China. I suffered the same situation with you. I ordered 100pcs from KS, but I still didn’t receive it. Unfortunately I did pre-sale in domestic market, my customers pushed me from Nov, I don’t want to lose my reputation in China, It is very important for us to do business. so I tried to contact the manufacturer of this bag per the info on KS “same manufacturer with samsonite”, I know that factory, it is famous in China, so I contacted them, I was told that they did have 2000 stocks in warehouse, waiting for their customer to pick them up. They can’t sell to us directly, they have signed contract, but if we need, they can make as they have material stock, so I negotiated with them, placed 500pcs order with them directly. they don’t accept order less than 1000pcs of each color, I am lucky because there is rest material. now I can hold my Chinese customers, but i am waiting my products from KS also.

Apparently, the Backzips Kickstarter project creator even appears to have stiffed the manufacturer. They apparently sent a deposit to create 2000 pieces and then never showed back up to pay for the finished bags, leaving the manufacturer holding the bag (2000 to be exact). Looks like the project creator screwed over everyone all around.

Let’s watch the Pitch video:

Don’t go digging out your wallet for this one, lest you become like the 1,495 other Kickstarter backers who got ripped off backing this project. Just keep your wallet firmly closed and your eyes open as we continue to the next beefy failure.


9. Where’s the Beef?

The Kobe Red Kickstarter campaign led by creators Magnus Fun actually had its plug pulled just before the campaign closed and before the project creator(s) got their money. Kobe Red was project to offer Kobe beef jerky that’s so tasty, “omg im licking my fingers in public” or so the text testimonial goes. The product was supposed to be the world’s first “100% Japanese Beer Fed Beef Jerky.”  Yeah, right. The project amassed over $120,000 in pledges from 3,252 backers.

The project creators never put up any substantial backing material to support the claims that they could, in fact, make this beef jerky, but they apparently did put up excited videos about how great it would all be. Unfortunately, I am unable to find a video for this particular almost-scam. The creators “Magnus Fun” deleted their Kickstarter account and along with it, their videos (which didn’t seem to make it to YouTube).

What went wrong?

It would ironically be another Kickstarter funded project that got the plug pulled on Kobe Red. That other project was Kickstarted. It was a documentary film crew investigating Kickstarter projects and just so happened to investigate this project at the time Kickstarted was being filmed. As a result of the fishy problems surrounding the Kobe Red campaign, these documentary filmmakers brought their information to the attention of Kickstarter staff, who summarily pulled the plug just before that $120,000 ended up in the bank account of Magnus Fun.

In this case, the backers didn’t get screwed and the would-be scammer got nothing…  lucky Kickstarter backers. Sometimes justice is best served with a side of 100% Japanese Beer Fed Beef Jerky. Let’s jerky on over to the next failure.


8. Burn me Once, Burn me Twice

The Laser Razor is a now-suspended Kickstarter campaign that managed to amass over $4 million in backing from over 20,000 backers, but couldn’t come close to delivering a working prototype. While the razor does have a cool look, I’d personally have been skeptical of this project (and the device), particularly after having watched that semi-amateur video. Just look at the quality of this video and tell me if you trust any of the people shown in it?

Let’s Watch:

While the video shows off a prototype of sorts, notice that it has a wire. That wire apparently is a small fiber transmitting the laser and may be enough to ‘cut’ the hair. Unfortunately, that fiber is incredibly fragile. The razor also can’t be used against the skin. It must precariously balance above the skin. If you go too fast or try to cut too many, the fiber breaks. If they had managed to actually make this thing work in a reliable way, it would ultimately be similar to a laser hair removal device. However, it wouldn’t be bright enough or go deep enough to affect the follicle in the pore. Instead, it would just lase the hair shaft from the surface of the skin. Unfortunately, this laser would likely be strong enough to burn the skin. Additionally, such a laser would likely be just dangerous enough to need eye protection while using it. Not something you’d really want to don every morning just after getting out of bed.

As a result of the lack of producing a functional and necessary Laser Razor prototype to satisify Kickstarter rules, the Kickstarter staff suspended the project before the creators received any money. Yet again, the backers were lucky. This is a bit unusual considering that the project had over 20,000 backers with over $4 million in funding. With $4 million on the table, you’d think that the creators should have been able to hire an engineer capable of pulling off a truly functional prototype. Nope.

After the project was suspended by Kickstarter, Skarp moved this campaign over to Indiegogo for a second campaign where it raised over $500,000 from over 2,700 backers (a far cry from what they raised on Kickstarter), but still not a slouchy number.

What went wrong?

In 2016, CNET visited Skarp to see if the prototype that Skarp had created actually worked. According to CNET, while it did cut individual hairs, it also broke during the demonstration. So, there’s that. Skarp did receive its funds from Indiegogo, but apparently Skarp is not willing to refund anyone. They have also, so far, not delivered anything functional.

Let’s watch this CNET report:

Skarp was apparently to deliver its first product in 2016, it is now 2018 and Skarp still hasn’t delivered anything. Skarp could have engineered a better standard razor in all that time while still working on their flagship product. At least release something. Skarp’s web site is still active at www.skarptechnologies.com, so someone’s still paying the bills on that. I guess it’s all of those Indiegogo suckers.. er… backers. Let’s try not to get razor burned again, m’kay?


7. Kanoa Borrow A Light?

When it comes to earbuds, Apple pretty much has it sewn up for the wireless category. There are few headphones that beat the functionality and quality of the Airpods (even as stupid as they look while wearing them). The Bluetooth connection to the phone or whatever, for the most part, is rock solid. There is the occasional drop out, but nothing too bad. They charge fast and they usually connect pretty fast.

However, Kanoa tried to create a set of wireless earbuds to compete with Apple’s Airpods via an Indiegogo campaign. They thought they could do better. Unfortunately, the Indiegogo campaign page is not available due to ‘pending review’, so I will have to write out the details about what it is rather than showing you the pitch video. The Earbuds touted a charging case, a small design, supposedly rock stable connectivity and app-controllable noise cancelling.

To prove their worth, Kanoa sent a pair of Truly Wireless Earbuds to a YouTuber to give an honest (ahem) review about them. When the YouTuber tried to use them, they failed in pretty much every conceivable way.

Here’s a 30 minute video Cody Crouch from iTwe4kz channel telling story about these headphones:

TL;DW — I’ll cut to the chase for you, you can come back and watch the whole thing later.

What went wrong?

Cody found that pretty much every feature that he tried to use had some kind of problem. The headphones paired to the phone fine. But, the earbuds wouldn’t pair to the app so he couldn’t control the noise cancelling feature. After several hours of screwing with them and a call to the company, he got it working. Then, when he tried to use the noise canceling feature, it failed with constant loud feedback when he turned the outside noise level up to above 60%. After that, the earbuds wouldn’t charge in the charging case properly and needed to be reset, but there was a complication because the charging case was itself charging. He had to unplug the charging case to charge the earbuds. When he went outside to to film part of the review, he tried to use them with the phone in his back pocket while on a skateboard. The earbuds wouldn’t work when he turned his head. They would disconnect. While he was on the phone with Kanoa working out these problems, the earbuds produced static.

He ultimately had conversations with the company about all of these problems and Kanoa eventually conceded to these problems by attempting to pay him $500 to create a good review of these earbuds. That’s when Cody gets really triggered. He then posts the above video stating what garbage the headphones really are.

After his video posted, the company shutdown and closed stating:

Capital funding is essential for ramping up production. Unlike on typical crowdfunding platforms we allowed backers to ask for refunds at any time. This policy kept us honest, but also added vulnerability once we had made major financial commitments. Setbacks and some bad publicity, like reviews of non-shippable beta units, stirred our audience. Most significantly and to our unpleasant surprise, our investors recently backed out of our funding round. We do not blame them, but this was a pivotal setback since capital was essential for ramping up production …Unfortunately, without that investment, we do not have enough capital to stay operational while we find a solution.

This carefully crafted statement basically sums it all up. Cody’s YouTube review caused, at least according to this statement, their financial backers to pull any further support and they had to close their doors. In 2018, their web site is down.

The moral here is not to request YouTube folks review your product, particularly if your product is not ready for general consumption. Just put the item onto the market and let the chips fall where they may. In this case, it’s probably best that Kanoa folded based on how junky and janky these earbuds were. Kanoa move to the next one now?


6. Fly Me to the Moon

Another failed Kickstarter project named Zano by its creator Torquing wanted to build a tiny drone that claims to be an autonomous, intelligent, swarming, nano drone. After all, drones have been around for quite a while, even super tiny ones. The drone would also contain lots of bells and whistles including a camera. Basically, instead of a bunch of cumbersome controls, the drone would follow your phone around taking pictures for about 15 minutes at a time. So, what’s wrong with this drone? That’s what the Kickstarter team wanted to find out after the drones sucked so badly they couldn’t fly properly. This Kickstarter project amassed $3.4 million in pledges from more than 12,000 backers.

Let’s watch their original pitch:

What went wrong?

In addition to various supplier problems, once Zano began shipping in Septemer of 2016, the company decided to ship the drones to pre-order customers rather than backers, which angered many. The few drones that did end up in the wild angered their owners for entirely different reasons. They didn’t work well. Sometimes the units would take off and land immediately. When they did stay in the air, they would randomly veer off course crashing into something. The drones also appeared to have no obstacle avoidance system as promised. Basically, all of the diatribe promised in the video never became reality. It was a bunch of smoke and mirrors.

According to Gizmodo, by November 2016 and as a result of all of the drone problems, Torquing declared bankruptcy. Along with that bankruptcy, so dried up the $3.4 million from all of the pledges. So ends the saga of the Zano and all of the money they raked in. Let’s drone on.


5. Deal Me Out

How hard is it to create a deck of cards? In 2012, Altius Management put up a Kickstarter campaign to produce ‘horrific’ playing cards on Bicycle playing card paper. This project amassed just over $25,000 from 810 backers. What happened? Altius Management couldn’t deliver on decks of simple playing cards. By 2015, this project was part of a lawsuit which a judge ordered the company to repay a portion of the money it had collected from Kickstarter.

Let’s watch their pitch video:

What went wrong?

Not sure entirely, but Ed Nash of Altius Management failed to deliver on the decks of cards for over 3 years. By 2015, a court had issued a judgement against Mr. Nash to repay the damages. Though, at the same time, Mr. Nash began making good on the orders and backers began receiving their decks. It was too little, too late for Mr. Nash. The court judgement still stood regardless of the decks being delivered.

Here’s one case where the backers were able to get at least something for the lack of delivery. Nope, no Aces up my sleeve, but there might be a Joker in this next failure.


4. Tripping the Light Fantastic

Here’s another Kickstarter campaign that started with grand plans. This time the creators Central Standard Timing promised to produce the thinnest watch in the world. It is called the CST-01. This watch is … well, let’s watch the video:

I know this one looks cool, but don’t pull your wallet out lest you become another of this project’s victims. This Kickstarter campaign amassed over $1 million dollars from over 7,600 backers.

What went wrong?

Apparently, the manufacturing process for this watch was a whole lot more complicated than anticipated. In 2015 after a whole lot of silence from the creators, the watch’s team posted a comment stating that the watch would be delayed due to losing their manufacturer. Not long after that notification, the company filed for bankruptcy.

$1 million dollars up in smoke. Some reporters claim it wasn’t malice, but that the company was in over its head. I don’t buy that. These companies know what it’s going to take to manufacture the product before they ever get to Kickstarter. If they don’t, they shouldn’t even be there. This should be question #1 from Kickstarter staff before ever listing a project of this nature. Time marches on.


3. Oh yeah? Oh, No!

Let’s now examine what might be considered one of the biggest crowdfunding successes that also became one of the biggest failures: Ouya. Though, the biggest failure award would actually go to #1 on this list. This console, conceived by Julie Uhrman, was touted to be the next best thing since sliced bread. Yet, what it turned out to be is a sluggish disaster worse than a generic $40 Android tablet. The Ouya began its dream as a Kickstarter campaign and ended as one of the biggest crapfests to come out of a Kickstarter.

Let’s watch their pitch video (note the mix of professional and amateur content):

The Ouya Kickstarter campaign amassed over $8.6 million dollars from 63,416 backers. That’s a lotta coin to rake in, but it’s not the largest Kickstarter funded project. Stay tuned, that’s yet to come.

What went wrong?

The Ouya is cheaply designed and built both inside and out. According to some buyers, the controller buttons would stick. Some buyers had their controller wear out within a week’s worth of use. The innards consisted of an Android based computer. But, it was a computer with far less power than your average Android smart phone or tablet. It could barely play games, according to many. Indie games were present on the console, but only when the Ouya had enough power to sufficiently play them. Most times, it didn’t.

The primary problem with any new console is adoption. Without getting developers to adopt the platform and begin writing or porting games over, it’s all done and your platform is dead. The Ouya never got the developer momentum going. It just floundered for too long. Worse, at a time when Ouya was still trying to fulfill orders to the backers, they decided to sell the console in stores. This is when the Ouya appeared in the likes of Amazon and Best Buy, and later Target. This made many backers angry who had yet to receive their console. Ouya ended up being acquired by Razer in 2015. As the TechCrunch article states:

Notably, Razer is not acquiring the hardware part of Ouya’s business, specifically the microconsole and controller …

Yes, best dump all of that Kickstarter baggage as quickly as possible. So, what happened to Julie Uhrman? After the acquisition, she ended up writing off the Ouya with her apropos closing tweet:

If you really want a high powered Android gaming console, you should check out the NVIDIA Shield TV on Amazon. I can personally vouch for the quality of NVIDIA’s consoles and controllers. These things are rugged, durable and the gaming system is a powerhouse (at least as far as Android gaming is concerned). Ouya on over to this next failure.


2. Dump that Ice, Party’s Over

Even though this Kickstarter product is still shipping on Amazon, this next one is considered by many to be a very big failure. This is the Cooler Master by Ryan Grepper. To some, this one is also considered as the second biggest failure in the history of Kickstarter. Some backers got what they were promised, but many are still waiting (even in 2018) for their cooler to arrive. It’s also not like this cooler is inexpensive at $450. As many as 20,000 backers had been waiting for two years for their product to arrive as recently as June of 2017 (more on this below). In fact, this was Ryan’s second attempt to create a Kickstarter campaign for the Coolest Cooler. The first campaign was considered a spectacular failure.

Grepper writes of his first Kickstarter attempt via this 2014 Mashable article:

that campaign was riddled with mistakes: the target funding goal was relatively high ($125,000), the design for the product wasn’t far enough along and the campaign launched over the winter when the last thing people were thinking about were coolers. Sure enough, the campaign fell more than $20,000 short of its goal.

After the failure of his first Coolest Cooler Kickstarter project, Grepper tried again seven months later. Grepper’s second Kickstarter project amassed a whopping $13,285,226 in pledges among 62,642 backers. This is one of the biggest Kickstarter fundraising campaigns ever. Though, not the biggest. That accomplishment (and subsequent failure) is coming up next. Before that…

Let’s watch the Coolest Cooler backer pitch:

What went wrong?

Extremely slow delivery of the product. Even as late as the middle of 2017, there were as many as 20,000 backers still waiting for their coolers to arrive. These 20,000 also found out, after a Department of Justice investigation, that they may have 3 more years to wait before it arrives. That’s over 6 years waiting for a product. That means some coolers may not arrive until 2020 for many backers of this project. This would burn me up. By then, as with many other of these Kickstarter project owners, Ryan’s company could be bankrupt. We’ll have to wait and see on this one. Nothing cool about this.

These two Amazon answers sum up all that went wrong with this product:

‘Nuff said.


1. I’ve Got Something In My Shoe

“What is the biggest failure in the history of Kickstarter”, you ask? Pebble. This e-paper based watch was touted by Pebble founder Eric Migicovsky to be such a great wearable, after all, just watch the positive upbeat videos below! In fact, the company thought it was so great that it warranted three Kickstarter campaigns. Yes, you read that right, three! Though, the third campaign was, in fact, a last ditch effort to save the Pebble company. It didn’t work.

The campaigns included the original Pebble, the Pebble Time and the Pebble 2 / Pebble Time 2 / Pebble Core. Between these three campaigns alone, the Pebble company received $10,266,845 for the Pebble campaign (68,929 backers), $20,338,986 for the Pebble Time campaign (78,471 backers) and $12,779,843 for the Pebble 2 campaign (66,673 backers) which totals an astonishing USD $43,385,674 from 214,073 backers! That’s an average of $202.67 per backer. So, what happened?

Let’s watch the pitches (fullscreen available):

Pebble Pebble Time
Pebble 2, Pebble Time 2 and Pebble Core

What went wrong?

The wearables market crashed and took Pebble with it. This Wired article tells all that you need to know about Pebble’s financial mess and the story behind the third, and ultimately failed, Kickstarter Pebble 2 campaign. Suffice it to say, Pebble’s sales took a nosedive in 2016 and Eric Migicovsky couldn’t find any further funding… so the company turned back to Kickstarter. In fact, of the Pebble 2 / Pebble Core Kickstarter campaign, Wired states:

The Core is destined be become a ghost product, a brilliant prototype that will never be delivered to the 24,000 people who ordered it on Kickstarter. (They will get refunds through the Kickstarter system.)

As of December 2016, Pebble closed its doors and obviously stopped making its wearables. According to TechCrunch, FitBit acquired what was left of Pebble for an estimated $40 million, apparently barely enough to pay off Pebble’s debts. However, in 2017, it was revealed by TechCrunch that Fitbit paid $23 million to acquire Pebble. That’s probably just barely the amount needed to cover Pebble’s debts. This, after Pebble had amassed nearly $44 million in Kickstarter campaigns. I’m quite sure the founders felt bad all the way to the bank. And with this failure, I’m so glad this pebble is finally out of my shoe.


Final Thoughts – Crowdfunding as a Platform

What do all of these failures say about crowdfunded projects? Think, people, think. If the project seems to good to be true, it is. Don’t invest money into crowdfunded projects unless you are entirely prepared to lose every last cent. And yes, it is investing. Kickstarter is not a store, even though it looks like one. Even when you do manage to get a product that works, you can see how quickly these companies that seemed successful can fail. Then what are you left with? In Pebble’s case, you’re left with an unsupported device. In Ouya’s case, a crappy console. Invest your money in companies that have a solid reputation for building high quality products and that have a history of remaining in business.

Investing in these startup crowdfunded companies is a recipe for failure. Kickstarter is a great platform to raise $50k to write a book, create a film, or even perhaps write an indie video game. But, don’t go into Kickstarter with projects that are at the $500,000 to $5 million dollar level. These levels of funding, while immense, have a high probability for failure. It seems that many project creators have little to no knowledge of either how to run a business or how to manage finances, let alone create a product. Some of them may even be hucksters simply out to part you from your money without providing anything. Stay away from these high dollar funded projects and put your money into established businesses with established products. You’ll thank me later for this advice.

Note, this is not an exhaustive list of all of the failures between Kickstarter and Indiegogo. Oh, no no no. There are have been a whole lot more than this list. It seems that there have been so many, I’d have to create a blog series to document these failures (and to document them as they continue to fail… and they will).

If you’re interested in such an ongoing series, please let me know by leaving a comment below AND by following this blog by clicking the blue Follow button in the upper right of this page. If you’ve been scammed by a crowdfunded project, please leave a comment and I’ll consider featuring it in a future article.

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Rant Time: Adobe VoCo’s ethical dilemma

Posted in best practices, botch, business, california, ethics by commorancy on February 28, 2018

I have to wonder about Adobe’s business ethics at times. First, there’s Photoshop. While I can admit that photo editing has a legitimate purpose, such as correcting red eye or removing telephone lines or removing reflections of the camera man from a photo, there is the much seedier and ethically murky purpose for Photoshop. Now comes Adobe VoCo. It is a product idea that does for spoken audio what Photoshop does for images. Let’s explore this YouTube clip from 2016:

Skip to 3:18 for the meat of this video.

VoCo’s Use Cases and Ethics

Though, yes, I will concede that the demonstration above was funny and we all laughed, the demonstration has a deep seated ethically murky undertone once the laughing stops. In fact, that’s what prompted this blog article.

Unlike Photoshop which has actual real world use cases (yes, other than making models thinner and glowier for the cover of Vogue), VoCo is one of those unnecessary tools that, while cool in theory, makes Adobe seem that it’s now in the business of causing world disruption instead of actually solving creative problems. After the ethical problems created by Photoshop, Adobe has to know the ethical quandary it introduces by bringing the VoCo audio editing tool to market. Adobe decides to go ahead with demoing this tool anyway. So much for business ethics. Instead, Adobe should have patented and shelved this product idea and never shown it off.

There’s no effective real world use case for this product other than for making someone say things that they actually didn’t say. The only use case where this technology might even be somewhat useful, depending on output quality, is in the voice over industry where an actor might be unavailable at a time when a line needs to be changed to fit continuity better. The voice over industry is the only industry where VoCo could have even the smallest glimmer of hope of a use case. This is such a tiny niche market segment to introduce this tool in such a public spectacle way.

The only other use case would be to sample all of the audio from a particular dead actor or actress’s productions and then recreate lines of new spoken dialog based on that. Again, this is one of those entertainment areas that fits firmly into the uncanny valley, particularly if the spoken lines are attached to a CG actor. Again, this is not a substantial use case in my opinion and is most definitely creepy. It’s definitely not a big enough use case to warrant this public release spectacle. Do we really want to see Marilyn Monroe or Elvis brought back to life on the big screen using CG and VoCo dialog?

There is no other legitimate use case for this product. It’s like Adobe intentionally wants to flaunt its lack of ….

Business Ethics and Self-Editing

Businesses today have no ability to self-edit or recognize ethics. That is, stop ethically bad product ideas from making it to the market. Just thinking about this product and how it could possibly be used, it doesn’t have legitimate use cases (other than the voice over use case I mentioned above). However, there are perhaps thousands of illegitimate uses for this tool. Let’s list a few of them, shall we:

  • Falsifying a deposition to make the person being deposed say something they didn’t say
  • Falsifying a statement of non-confession to make a person confess to a crime when they didn’t actually confess
  • Falsifying a phone conversation
  • Changing any spoken words from non-incriminating to incriminating evidence

In legal circles, the use for this tool is ripe for abuse and has use cases as wide as the Grand Canyon and as deep as the Mariana Trench. In other words, while VoCo has no substantial legitimate use cases, it has thousands of illegitimate use cases. There is no way Adobe couldn’t see this. There is no way for Adobe to feign ignorance about this tool or the ethical problems it imposes if released.

Legal Evidence

Some have theorized that this tool would become just as Photoshop has. Basically, because evidence can now be manufactured in products like VoCo, it means that audio evidence would no longer be easily admissible. While that idea has some soundness to it, the legal system is not always technically savvy and can sometimes move at a snail’s pace. Eventually, the courts and lawyers will be on board with this ‘manufactured evidence’ sound clip idea, but not before several someones are incriminated over manufactured evidence that isn’t caught in time.

Some have theorized that Adobe should watermark the sound clip. The difficulty with audio watermarking is that it ruins the audio. No one would buy a professional audio tool that intentionally makes the audio sound bad or introduces something that is audibly noticeable, strictly because Adobe wants to insert a watermark to legally cover their collective butts. No. No one would buy a tool that causes damage to the audio output. This means that only a silent kind of watermark could be introduced. Such a watermark would consist primarily as a tag within the saved audio clip file. Any tags introduced in a save file can easily be stripped away by converting the audio clip to a new format or by playing the audio clip back and recording it on analog equipment. In fact, a whole industry and set of tools would likely appear to strip out any watermarks imposed by Adobe onto the saved files.

Unless there is a substantial way to identify that the clip has been edited, and I don’t know how Adobe could even solve this problem fully, VoCo is a tool that would end up more abused than legitimately used.

Flawed Product Ideas

While this is somewhat of a cool technological advancement, it doesn’t need to exist. It doesn’t need to exist because it has basically one limited use case. I’d argue that as a production runner, you can just wait until the voice actor becomes available and ask them to re-record the lines you need. That is, instead of using a tool like this. A tool like VoCo might save you some time, but by demanding such a tool for your use, it means the rest of the world must also endure the consequences of a world full of falsified evidence. Is that the world you want to live in? Evidence that could even be used against you, the audio editor. No, thanks.

However, it’s clear that prototype code has been written based on the video above. This means that Adobe could release such a product into the wild in the future. Thankfully, as of this article in 2018, this product does not yet exist. Unfortunately, Adobe has already opened Pandora’s box. A working prototype means that any coder with leanings towards audio engineering could produce a similar tool and release it into the wild without the help of Adobe. Thanks Adobe.

It is as yet unclear when or if this product could ever be released. Note that this video segment apparently showcases experimental product ideas (products that may never see the light of day) and not actual products. After all, such a legally murky product would have to clear Adobe’s legal team before release. Considering the many negative use cases for such an audio editing product and the legal liability that Adobe might endure as a result, I’d hope that Adobe’s legal team has shelved this product idea permanently.

Agree or disagree? Please leave a comment below. Also, don’t miss any new Randocity articles by subscribing to this blog via clicking the blue follow button at the top right.

Rant Time: eBay and shipping fees

Posted in botch, business, california by commorancy on January 30, 2018

This one will be quick. Today is the day I decided to do a little shopping and hopefully find a bargain online. Once again, foiled. Why? Let’s explore.

Bargain Shopping

I open a browser and go to eBay. I go there because I typically expect to find reasonable prices on most things. Sometimes I can find item prices at substantially reduced prices from Amazon. However, today wasn’t one of those days. I began searching for a specific item and I actually found it. In fact, I found the item at a very reasonable price. I even found the same item on Etsy with this very same listing problem. The problem wasn’t the price for the item, but it was in the shipping costs. I’ll skip mentioning this specific item because it’s not really relevant to the article. I’ve seen this problem on and off for many different items over the years. I’ve finally decided to rant about this problem.

While I can find the item I want at $5.99, I see that the shipping fee is $18.00 (or sometimes higher). What ridiculousness is this? Why am I expected to pay 3x the price of the item in shipping fees? No, I just won’t do that.

Stop These Listings

I don’t know what goes into that $18 cost, but many times I see the item is shipping within the US to a US address. Yes, I realize that FedEx and UPS and even the USPS (to an extent) aren’t always inexpensive for shipping. But, who in their right mind would pay $18 to ship an item that costs $5.99 or less? Not me.

It’s time that Amazon, eBay and Etsy stopped these listings. There is no reason to force would-be buyers to weed through useless listings like these to find someone who’s willing to offer a much more reasonable shipping fee. It would be a simple matter for these sites to decline to list items whose shipping fee exceeds 1x the cost of the item. When it gets to 3x the cost of the item’s price, it’s way too high and a waste of a listing. How many people would really pay that?

Maybe there are some people out there desperate enough to pay that high a cost for shipping, but I’m not one of them. I firmly believe that to be any kind of a deal, the shipping fee should be equal to or lower than the cost of item being listed. If shipping costs exceed the price by more than 1x the item’s price, the listing should be refused. Or, alternatively, make the default search filter remove listings with unnecessarily high shipping fees. For the people really interested in paying high shipping costs for an item, then click a checkbox to enable searching these. Yes, it is time to penalize sellers trying to price gouge through shipping fees.

Shipping Scam and Advice

I do realize that for a time there was a scam going around that sellers would back load the cost of the item into the shipping costs. So, instead of listing the item at a reasonable price, they would list the item for $.99 and then back load the item’s cost into the shipping and handling fee at something like $19.99 or similar. The reason for this is that it makes your product seem low priced until people looked at the shipping costs. It was simply a way to game the search listing sort engine. I’m sure that the seller thought they could trick someone into thinking they’re paying $.99 by not looking at the shipping fee. That’s a very old trick. A trick, in fact, that eBay is so well aware of, all of their listings now tell you shipping costs up front right in the search listing page. As a seller, it does you no good to try and trick the system using such tactics. Instead, it only makes you, as a seller, look like you’re trying to pull a fast one.

If you have something to sell, be honest with your prices and your shipping costs. People prefer honesty over trickery. If you know your shipping and handling is going to end up at $40 for a $5 item, don’t even bother to list the item in that way. It’s not worth it. This also makes you look inept. It would be better to front load your costs into the item itself and then reduce your shipping costs. In fact, you might as well just include the cost for the item plus the shipping costs together and state that it’s free shipping. You’re likely to attract more buyers this way than attempting to back load your costs into the shipping and handling fees.

Ridiculousness Abounds

Over the last several years, I’ve seen more and more of these kinds of shipping ripoff listings. These sites need to crack down on the listings with overpriced shipping and stop them (or, at least, filter them out by default). When I go shopping, I’m always looking for a deal. If as a seller, you can’t provide me with a deal at least as good as stores in my local retail area, then don’t show me those listings at all. Few people would want to pay 3x or higher in shipping costs for a seemingly low priced item. It’s just not a sustainable product offering.

If you have put items up on eBay or Etsy and sold them with a shipping cost 3x higher than the price of the item, sound off in the comments below. I’d like to know if you were able to sell that item or if the listing expired. My guess is that the listing expired. If you did sell the item, I’d like to know if your buyer was satisfied or dissatisfied with what they spent on shipping fees. I’d also like to know how many people returned the item once they found out the actual shipping costs.

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Home Automation: The good, bad and ugly

Posted in Apple, botch, business, Philips Hue, wink by commorancy on December 17, 2017

You’ve just picked up an Amazon Echo with a Hue Starter Kit and you have decided to take plunge into controlling small devices in your home via Alexa. Well, here is what I’ve learned so far about this process. Take note, it’s not always easy to set this up. Keep in mind that I haven’t explored every system or every device. This article documents only my experiences with those devices I’ve tried. Let’s explore.

Smart Home Hubs

The first thing you need to understand is that many home automation systems still require a centralized hub to control the accessories (i.e., lights, switches, dimmers, and plugs). Systems like Wink and Hue are good in that a hub aggregates all of the accessories under a single logical device, these devices also have their own pitfalls. Some lights and plugs are WiFi only and do not require a hub, leading to even more consumer confusion, more apps and more logins and passwords.

As an example, Hue’s bridge (hub) comes in several versions (I’ll explain the reasons for this shortly). If the you stay within the Philips universe of devices, then you’ll be good. However, the moment you step outside of the Philips universe, just like with Apple’s products, compatibility takes a significant dive. It’s the same situation for Wink. As long as you wholly subscribe to the devices that are compatible with a Wink hub, you’ll be perfectly fine. If you choose to add in a bulb that isn’t compatible, your days will become far less happy. Worse, if you want to intermix devices from the Philips universe with the Wink universe, you’re asking for a world of hurt.

Intermixing Devices

So you’re probably asking, “why would I want to intermix devices?” It’s very simple. Cost. While the Hue color bulbs are spectacular for producing vivid colors, they aren’t so great for their brightness levels and they are substantially pricey. If you want to get a bulb that supplies higher than 50-60 watts of effective illumination, you have to jump out of the Philips universe. I don’t know why Philips is dragging their feet on 75 and 100 watt Hue bulbs, but they are and its frustrating.  That means you might end up over at GE or Cree or even looking at LIFX bulb.

Costs, Value and Brightness

Hue bulbs are also incredibly pricey. At around $60 per color bulb, changing every bulb in your home is likely going to cost hundreds or perhaps thousands of dollars. Even the ambient white colored Hue bulbs at $30 are still quite pricey because they can range their colors between cold and warm white. If you simply want a bulb you can turn on and off and dim, there are far cheaper options… like the Cree Connected (~$15) and the GE Link (~$20). These are quite a bit less costly than the Hue white ambience bulbs. However, Hue also makes a 4 pack of white dimmable bulbs that cost around $13 per bulb (note that this may be holiday pricing). However, these bulbs are simple on, off and dim only. They do not vary the color hue of the bulb. The color they are is basic warm white… same for the Cree and GE Link. You also have to buy these Hue white bulbs in a 4-pack to get this lower pricing. Otherwise, each Hue bulb will cost around $17 separately. This 4-pack is your best deal for low cost hue bulbs. However, they are also not that bright.

At the time when I purchased into the Cree and GE Link, Philips still didn’t make these less costly bulbs. These are relatively new additions to Hue’s line and likely came about because of the Cree and GE Link bulbs.

What that means is that I’m not about to abandon the two bulbs I bought just to go buy four replacement Hue bulbs. The GE Link bulb is also quite bright, brighter than the Hue bulbs even though it is supposedly a 60 watt equivalent. Clearly, some bulbs are brighter than others even when rated similarly. This is why it’s important to look at the bulb illuminated to see if you like the color temperature and the brightness.

Clearly, we want good quality long lasting and bright lights. Specifically, lights that are bright enough for the given fixture and room. You may only need a 40 watt bulb in some instances, but in others you might want a 150 watt bulb. Sad to say, there aren’t many 150 watt LED equivalent bulbs on the market. Even of you find one, it’s not likely to be a connected bulb (see WiFi plugs below). The brightest bulbs seem incompatible with being connected. I don’t know why that is, but few lighting manufacturers want to produce both a connected bulb and a bulb that’s brighter than 60 watts. 60 watts is incredibly dim by itself. You’d need at least 4-7 of them in a fixture to sufficiently illuminate a living room.

Why there aren’t any 100 watt bulbs to date? I have no idea. Philips, GE and Sylvania need to get right onto solving that problem.. and soon.

Compatibility

If you’re willing to stay within a single manufacturer’s universe of apps, plugs, switches and bulbs, then you won’t run into many compatibility issues. If you want to actually do something useful, like use the Amazon Echo or IFTTT or Google Home or any other third party product, that’s when you run into problems.

Amazon’s Echo is probably the single most compatible home automation platform out there. However, that said, I’d consider Amazon’s Echo to only be about 80% compatible with most products. There are still a lot of products that cannot be controlled by Alexa, even though they have apps. IFTTT fares far worse at about 50% compatible. Apple’s Homekit is about 30% compatible with most systems. Though, if you’re willing to stay in the Philips universe, Apple’s Homekit jumps up into the high 90% range for compatibility. On the other hand, Apple’s Homekit has very little compatibility with Wink. Supposedly the Wink hub 2 is compatible with Homekit, but apparently that hub barely even works.

To get a fully functional Wink system, you have to use the Wink hub version 1 which isn’t compatible with Homekit. You’re probably asking, what is Apple Homekit? Homekit is Apple’s built-in small device automation system which is compatible with Siri. If you want task Siri to turn on, off or dim your lights, that assistant uses Homekit to get the work done. If Homekit can’t see your lights or accessories, it can’t control them.

There are many devices that Alexa can see and manage that Apple’s Homekit can’t. Apple has just floundered around doing nothing to improve compatibility to other home automation and lighting systems. This means that clicking the home icon to control your lights may or may not work on iOS… and more likely not to work than work.

Multiple Hub Versions

Hue’s system comes in several different hub versions. So does Wink. So does Zigbee and WeMo and many other device makers. These upgraded hubs add new features, such as compatibility with Apple’s Homekit or Google’s system. Keep in mind that even if a hub says it’s Homekit compatible, that doesn’t mean it’s fully compatible. It may only offer iOS the most bare bones minimums such as lights on and off, dimming and possibly color changing. Hue, for example, still prefers you to singly control all of their lights through the Hue app rather than through Apple’s Homekit compatible controls. Hue adds such extra features as light scheduling, vacation randomization and proximity fencing. Proximity fencing allows you to program the hub to turn lights on when near or off when out of range. These types of services are not visible through Homekit.

Fractured System

So what have I learned then?

  1. Philips Hue system is great so long as you don’t stray outside of it. Philips own bulbs work perfectly. Philips Hue can also see and control Hue compatible, but primarily Wink bulbs. Hue will not update firmware on any devices other than Hue devices. This is not optimal or in any way secure especially since you can only pair a device to one hub at a time.
  2. Wink will update fully Wink compatible bulbs, but won’t update firmware on Hue bulbs. Upgrades for Hue happens through Hue’s system.
  3. It is possible to run two hubs controlling different devices, but Wink’s hub won’t talk to Hue and Hue’s hub won’t talk to Wink.
  4. To bridge these two systems, you’ll need something like Alexa that can aggregate unlike device networks into a homogeneous whole.
  5. Alexa can’t aggregate bulbs and devices that aren’t Alexa compatible. So, you always have to read the box to make sure. Even then, you’ll likely need a skill to make it Alexa compatible.
  6. With Alexa’s skills, you can have Alexa log in to manage any device that offers a skill. You can then aggregate these devices under Alexa groups to control unlike systems.
  7. Homekit is the least compatible home control system out there. Don’t rely on Siri to control your devices unless you are meticulous in ensuring all of your devices are 100% Homekit compatible. This is likely to be costly because Apple is only willing to integrate with companies willing to pay money for this. That automatically means that only those companies making significant bank will be willing to pay off Apple to that end.
  8. Hue’s motion control sensor triples as a light and temperature sensor. Oddly enough, the only way to see the light and temperature pieces is through Homekit. Philips Hue app won’t show these sensors. This means you have to try and piecemeal together a system from pieces here, there and everywhere.
  9. Alexa still cannot directly set the color of Hue’s color bulbs. This must be done via a predefined IFTTT applet.
  10. Homekit can set the color of Hue’s color bulbs directly via Siri, but is limited in many other ways… specifically in the exact wording of how to get Siri to control the devices.
  11. Updating firmware on devices requires the correct app or hub. For example, Hue will update Hue devices, but not third party devices. If you want to update your third party devices, you need the right app or hub. Leading to….
  12. A device can only participate in any one hub system at any one time. Because I wanted the latest firmware on my GE and Cree bulbs, I had to buy a Wink hub and pair them with that. That also means I can’t use my Hue motion sensor to turn off one of the lights in a bedroom any longer. Now I have to buy a D-Link sensor and use that… adding to the cost and more hassles.

I find these systems fractured and annoying. There is no standard at all. Philips does what they do. Wink does similar, but is not compatible with Philips unless you buy into the Hub 2 (which is apparently junk). Sylvania is doing their own thing. Many bulb manufactures are now choosing WiFi for their bulbs to avoid even needing a hub. This means many competing standards in the lighting control area.

Until Philips or other lighting manufacturers put together a consortium to better the home automation world, home consumers will suffer with many competing and incompatible standards.

Electric Outlets

Recently I have gotten into controlling some devices using small connected outlets. Obviously, the devices to be controlled are dumb devices like plain old lamps or holiday lighting. They can’t be dimmed or change their colors, but they can be turned on or off. Once setup for control, I can enable scheduling to turn them individually on or off at specific times. However, what I’ve found here is just as fractured and confusing as the lighting systems. These plugs don’t require hubs. They are straight up WiFi devices.

I’ve so far bought the following:

  1. A WeMo branded outlet
  2. Three Conico / Jinvoo controlled outlets
  3. One TP-Link controlled outlet

Each of these devices has their own app and requires its own username and password. WeMo’s outlet uses the WeMo app, Conico uses the Jinvoo Smart app and TP-Link uses the Kasa app. Three apps and three logins for similar kinds of smart plugs. Yet more garbage on my phone and more passwords to remember.

However, because each of these apps have Alexa skills, I can set Alexa up to control all of them via a single device group. I have two of them controlling my Holiday lighting strands. I have a third as a bathroom night light and fourth and fifth not yet allocated, but likely will control more holiday lighting. I can put individual schedules on each of these plugs and I can voice control them via Alexa individually.

Unfortunately, to set up schedules, I have to do this in the phone app. This setup cannot be done in any single place. This is why this fracturing of devices is so bad.

IFTTT

What is this? This acronym stands for ‘IF This Then That’. It’s a small simple type of programming language. For example, if I say, “Alexa, trigger blue bedroom”, Alexa will send the command to IFTTT.com that will then interpret the command and perform the programmed action. The action could be turn off a light, send an email, send me a text or any of a wide array of actions. It’s a 1 to 1 action. Something happens, something is triggered.

How is this a problem here? I talked about the motion sensor above. This Hue sensor is captive to the Hue world. IFTTT has no way to capture any of the Hue sensor data and act upon it. Hue’s developers have not exposed any of this data to IFTTT for triggering alternative actions. For example, I’d like to turn on some lights if the motion sensor is tripped. While I can do that from within the Hue universe of devices, I can’t turn on both Hue and Wink lights from that motion sensor. Worse, the only thing I can do with the Hue motion sensor is turn on a device. I can’t send an SMS or email or anything else like that. Even though IFTTT can control both my Wink and Hue bridge devices, there is no action to read from the Hue motion sensor.

Instead, I had to opt into buying a D-Link WiFi motion sensor that is IFTTT compatible. This means I can then capture the motion event, send it to IFTTT to trigger an action of turning on a Wink and Hue bulb. It is not possible to do this with the Hue motion sensor. At least, that’s the theory. I haven’t yet received the D-Link sensor, but based on its description, it should be possible.

Overall, the world of home automation of small devices is fractured and confusing. There are many competing standards that don’t help the consumer in any way. In fact, this situation is made worse because device manufacturers intentionally hobble their own systems to prevent use of third party devices. This leaves home consumers to fend for themselves while trying to find a way to get their home system working. While I can understand the profit motivation in creating a captive ecosystem, it doesn’t in any way make it easier for a consumer. Until there’s a standard that all manufacturers agree to follow, we’re going to continue to see device after device using its own standard and supplying its own app to control that device.

If you’re going to invest in a smart home system, I’d suggest staying within a specific manufacturer’s ecosystem if at all possible. However, smart outlets may not be available under all systems. I don’t believe that Philips yet ships any smart plugs that are compatible with Hue. Wanting to add controls for plugs or other devices might mean the need for outside devices. However, even then I’d suggest sticking with a single manufacturer. Even if you use Hue and WeMo, that’s better than buying plugs from all over the place and trying to integrate 5 or more systems together. You may have to pay a premium to keep the number of systems down, but it will help keep the confusion to a minimum.

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