…No, I don’t think its themselves.

I was more excited about the speakers. Except they didn’t work. Same exact problem as last time: the LCD that’s supposed to show volume/treble/bass didn’t work. I know what most of you are thinking: are you sure you set them up right?

I can tell you that I tried every possible setting on the thing (there aren’t that many). If anyone has any recommendation on a good set of 2.1 speakers suitable for a small home office, let me know.

I had to send them back today, because the LCD that’s supposed to show volume/treble/bass didn’t work. No lighty.

I had the option of getting an exchange or refund. However, it seems like Amazon’s exchange means you just buy a duplicate item and send back the defective one. It seemed like I’d be responsible for the shipping charges. The alternative, simply returning for a refund, meant that they’d pay shipping charges.

Returning was very easy: since I still had all the packaging and shipping box from the item, I printed out the UPS slip. put the RMA in the box, taped it up, and took it to a UPS store. At the same time, I ordered a new one, because I really want those speakers (provided they work).

The first set took a month to get here. This second set says it’ll ship on the 23rd. I’m really hoping that they’re not waiting for me to return the defective pair so they can just ship it back to me.

Wonder of wonders. I also found out today that a replacement for a defective 1 TB hitachi drive has been shipped today.

I need to remember around Christmas time that when I buy all this tech crap, I only end up sending a good chunk of it back mid-winter. From now on, I stick to online gambling.

Didn’t really care for the rest of the album, though.

My understanding of the web site proceeded in stages:

1. It’s ebay
2. They’re losing money
3. You can game the system
4. It’s a gambling site

Caution: if you have a gambling, do not visit this site. Buy a lottery ticket instead. If you have an eBay problem, do not visit this site. Turn off your computer now if you are in both categories.

It’s e-Bay

Well, there are some major differences between Swoopo and eBay.

First, eBay doesn’t charge the bidder to place a bid. On Swoopo, you (as a bidder) need to buy bids ahead of time, at a rate of 60 cents per bid (this used to be $1 when they first started ,so apparently, they’re doing well).

Second, when you place a bid, you don’t pick the price. Swoopo increments the last offer by a fixed amount—a penny, 6 cents, 12, cents—that’s determined before the start of the auction.

Third, the only people selling things on Swoopo are Swoopo themselves. There’s no used stuff; it’s all new merchandise, and only the owners/operators of Swoopo are selling it.

Fourth, eBay (last I checked) had a defined time-limit on all their auctions. However, on Swoopo, every time someone places a bid, the auction gets extended—typically by 20 seconds, but we’ve seen it jump by minutes at a time. (In fact, one of the only reasons I didn’t place money on an auction at this point was that I couldn’t figure out how the auction time would get extended; seemed like there were no rules to the game.)

They’re losing money

While my co-worker and I were talking about the site, we missed the following ounce of gold going for $3.41:

Yup. That’s right. An ounce of gold is worth around $1100 and this guy bought it for $3.41 (plus whatever he paid for his bids). So, altogether, he got the gold for $78.41 – which means Swoopo made a loss of $1,120.59.

Seems like Swoopo would be losing money on transactions like these. And they are. Except they make it up on other transactions. Consider this purchase of gold for $203:

Since each bid increased the price by 1 cent, there were $203.13 = 20,313 bids placed. Each bid costs 60 cents, so Swoopo got $12,187.80 in revenue. The gold costs around $1100, so they netted around $11,000 on that auction. Note, however, that the person that won the auction still got a really good deal. He spent around $600 for $1,100 of gold.

You can game the system

So, how can you make sure that you win (and not someone else)? Well, you can wait until the other bidders have fueled the price higher and then just “swoop” in and place the final bid.

Except you can’t do that, because someone else can swoop your bid and keep the auction going.

Certainly, if there are fewer other bidders, your chances of winning the auction are better. Perhaps you can participate in auctions late at night, when people are asleep—or during the day, when people are working. Except the auctions run internationally, so there isn’t that much change in interest. (I checked this by visiting their UK site and verifying that the same items were presented in UK as in the US.)

There’s a bit of game theory here. It reminds me of the case that comes up where everyone is at a party and there are multiple conversations going on. One person (maybe saying something important or may be having trouble hearing) starts speaking a little louder. That causes the people around him to speak louder—and eventually everyone is yelling. Despite the fact that everyone could speak quietly and have the same (or better) ability.

Similarly, if all the bidders knew each other and could trust each other, the bidding could stop early. The final auction price would remain low, and people would place fewer bids (and each bid costs 60 cents). Of course, swoopo does a good job of not letting the bidders communicate. Plus, there’s a risk that everyone may say they won’t place the next bid, but someone might do it anyway.

The only time someone wins the auction is when all the other players say, “Someone keeps bidding on top of my bid. I’m wasting bids. I’m going to wait for someone else to place it and I’ll save my bids for a little later.” So, you basically need all the participants to have the same thought: “I’ll let someone else get this bid.”

That’s pretty low probability. It’s very similar to the lottery: everyone buys a ticket and fills the pot. Now, one of the tickets is going to win, but we don’t know whom. There’s another analogy: it’s gambling. Sure, the casino pays out every now and then, but most of the time, the house wins.

It’s gambling

So, in the end, I started to realize that this site was less about selling stuff and more about getting around gambling regulations. The key thing that determines whether you win is when all the bidders think the same thing (and don’t place a bid)—which is definitely as random as a deck of cards.

Postscript

A friend of mine came up with an interesting observation: the site allows you to put your bids toward the “purchase price” of the item at any time. So, if you’ve put in 100 bids on a $600 American Express gift card, then, you can buy it for $540 ($600 minus the $60 you spent on your bids). The site calls this “Swoop it now”. If that’s the case, you should always bid on things where the purchase price is a definite value. That way, you can always hop out of the auction and do the “swoop it now” to recoup the cost of your bids. Unfortunately, Swoopo has filled in this hole by only presenting defined-value items (gold, AmEx gift cards) as a bundle with packs of bids:

So, if you do “swoop it now”, you get more bids which are only worth something if you’re entering another auction. I have another theory behind this action: it causes people to mentally think, “Oh, I can bid at least 200 times and it’s essentially free.” And, if 10 people think this, Swoopo makes 9x the cost of the bids vouchers its bundling.

Great song. Great album.

The premise of the book is that we tend to credit outstanding performers (“outliers”) with outstanding skill. While Gladwell does acknowledge that all outliers do have top-notch ability, he makes the case that ability is not enough: there also needs to be some external situation that enable this ability to jettison a person to the upper rungs of performance. Since many people have ability, but few people have favorable circumstance, we should really credit the circumstance with the generation of peak performance.

The book is not science in the true sense of the term: There are no controlled experiments to show that ability is a weaker predictor of success than is circumstance. However, one could argue that such a controlled experiment is impossible: you can’t hold all other things equal—and Gladwell has come pretty close to performing the experiment (retrospectively) by considering both people with great talent and great circumstance that accelerate to the pinnacle of their field, and people that have great talent but not circumstance. The best we can say is that Gladwell is a journalist and he has gone beyond the 3-example rule to give evidence of his hypothesis. However, he has not scientifically proven it. A larger (statistically valid) study could prove it.

That said, his description of how things happen rings true with me. I can’t say that I’m at the pinnacle of my field. (Lately, I can’t even define the field.) However, I did benefit from some good circumstances in my life:

• When I was in the 5th (?) grade, my dad brought home an HP computer from work. I quickly began programming in BASIC and plotting sinusoids. I learned a lot about both math and programming from the experience. My parents continued to buy computers: I started programming on Windows 3.1 when I was in 7th/8th grade.
• After I finished the 6th grade, my parents moved us to the US. This was a designed shift in circumstance. My parents wanted my sister and I go to high school and college in America. They worked very hard to get us here.
• Going to University of Illinois, I met someone who would later be a partner at Infinium. That certainly helped get me in the door at Infinium.

In addition, it’s clear to me that Infinium itself illustrates the sort of paradigm shift that Gladwell talks about in the book: the founders of Infinium predicted that things would go digital and be software-driven—and that one could then do automated trading.

The chapter on the Canadian hockey teams also reinforces a principal I’ve learned over the years: coaching is for everyone, not just for your good players. I think in corporate environments, there’s an over-emphasis on differentiating talent. That differentiation is good. However, it tends to get confused with where managers spend their time. That’s a shame; as the book shows, structures that seem to be meritocracies can be fatally flawed. 

I thoroughly enjoyed this book . I especially recommend it for teachers, managers, and parents. (Yes, I know that covers a lot of ground.)

This has remained in my top-ten favorite songs for almost a decade.