It’s OK To Get Scammed (Sometimes)

You’ve got a fabulous deal lined up, and stand to make big profit, but you’re afraid the other person will back out or scam you. Here’s a simple formula I developed to help you count your chickens before they’re hatched (or stolen). This works in recruiting, real estate, storefronts, restaurants, contracting, web design, or anyone else who runs the risk of not getting paid, or worse, getting ripped off entirely.

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The Risky Buy

So you’ve decided to start a business buying and selling gold, but you have no idea how to tell real gold from fake gold. Gold is currently $1,000 per bar. You’re talking to a guy who wants to sell you gold for $800. That’s a great profit, but you figure there’s about a 15% chance the gold is totally fake. This means that you have a 15% chance of losing your $800 investment, but an 85% chance of making $200 profit. On average, in the long run, you will make $50 profit on this transaction, so even with a 15% chance of getting scammed, you come out ahead.
Gain – Loss = Profit
0.85 * $200 – 0.15 * $800
$170 – $120 = $50

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The Risky Sell

You have a guy trying to buy your gold.  You know this gold is real, but he has doubts.  He wants to take it to his friend to inspect it, then come back and pay for it. He’s offering to pay $1,200 if it’s real, and putting down a $900 dollar deposit to ensure he comes back. After looking at his $900 deposit, you suspect TWO of the bills might be counterfeit. In this case, your potential loss is $300 (since gold is currently worth $1,000, and two of the bills he’s giving you for deposit might be fake, you can only rely on $700), your potential profit is $200 (since the $1,200 sale price minus the base cost is $200). You are having a hard time reading the guy, and aren’t sure how trustworthy he is. Here’s the formula for that:
(1-S)*P – S*L = A

Where S is the chance of getting scammed, P is the profit if it succeeds, L is the loss if it fails, and A is your average expected profit. If we knew what our chance was of getting scammed, we could figure out the average expected profit. Lets do it the other way; set the average profit to 0 (break even) and see what kind of odds we would need. Solve for S
(1 – S)*P – S*L = 0
P – PS – LS = 0
P = PS + LS
P = S*(P + L)
P/(P + L) = S

So the profit we stand to make, divided by the sum of the profit AND the loss, is the frequency with which we can get scammed and still run a profit. In our case above, with a base line of $1,000, a $900 down payment (only $700 of which we are sure is real), and an expected final payout of $1,200, our profit is $200 and our potential loss is $300
$200/($200 + $300) = S
S = 40%

This means that if 40% of the people scam us (or, if we’re about 40% sure this is a scam), we can still break even. In order to make this profitable, we have to feel that more than 60% of the people will come back, or if exactly 60% come back, raise the price above $1,200, and we can still run a profit.  If the realization that at least 60% of the people will need to come back freaks you out, don’t do the deal.  If you’re pretty sure 60% of the people will come back, go for it.

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The Sales Forecast

Say we decide gold is too risky, and we start brokering deals for other gold merchants. Any of the people might back out, or the deals might fall through, but you’ve got bills to pay and your weekly profit is all over the place, so you want to try to figure out what type of income you’re going to make for this week. Apply the formula to each individual sales chance and add it up:
S = Chance the person will back out, or deal falls through
L = 0 (you lose nothing if you don’t broker the deal)
P = How much will you make in profit if the deal closes
SP + SP + SP + … + SP = Monthly Profit.
So say you have 3 people who you expect to make $1,000 profit if it closes, but odds are only 1/5 people will close, and you have 2 people who you expect to make $500 from, with a 1/3 chance they close.
3 * $1,000 * 1/5 + 2 * $500 * 1/3 = $600 + $333.33 = $933.33

Even thought it could be as low as zero, or as high as $4,000, you can expect to make about $933.33 on long term average.

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Conclusion

In retail it’s called “shrink”, in Vegas it’s called “house advantage”, and in restaurants I’m pretty sure it’s called “Hey, that jerk didn’t pay his bill!”.  In contracted web development and software design, we call it “business as usual”.  No matter what it’s called, it’s OK to get scammed once in a while. Just don’t use 100% of your funds in a single transaction.

Rather than trying to find a surefire way to make a transaction scam-proof, or find a way to outsmart the con artists, just try to master the art of figuring out what the odds of getting scammed are, pay attention to how often you’re getting scammed, build it into your profit margin, and let probably take care of you. Everybody gets ripped off sometimes, but remember, if you figure it up and have a negative long term average but decide to go through with a transaction anyway because the profit is just too tempting to say no, you may as well close your business and take your money to Vegas.  At least there after they scam you, they give you a free Gin & Tonic (I have a formula for that, too; one part gin, one part tonic).

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Happy Monday!

People hate Monday. It’s named after The Moon (dumb), and is the business week’s farthest point from Friday. I greet everyone with “Happy Monday” every week. Being viewed as cheerful greases the wheels of business, but being perky all week takes too much effort.  Embracing something as dreaded as Monday puts you in a positive light right at the start of the week, while at the same time being somewhat quirky and joking.  It’s like you’re smiling and saying “Haha, Monday sucks, but what can ya’ do about it, eh?”

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May as well do it with a smile…

When I was about 5, I was playing video games and my dad came in and told me to clean my room.  Like a seasoned defense attorney making a final statement, I whirled into a counter-argument citing all the reasons not to clean my room, how I was almost to the final boss and I hated doing it and you could barely see the greasy fingerprints covering everything.  My dad listened patiently, and after I was done complaining, he banged the dad-gavel and said “Guess what, you STILL have to clean your room, but now you’ve wasted video game time, and I’m also annoyed at you”.  As I served my 10 minute sentence, the words sunk in, and somehow I got it; if you HAVE to do something, you may as well pretend to like it, or you don’t get as much credit for doing it. It took me almost as long to complain about it as it would have taken to do it, and several minutes before I finished my dad came back in to make sure the lesson stuck and reminded me “If you hadn’t wasted all that time complaining, you’d already be killing the final boss”. Sulking around doing something slowly is wasting your own time.  With that short sentence, my dad had engineered a child that raced to complete tasks as quickly as possible (while of course being careful to do it right so I didn’t have to go back and do it over again), which continues on to my aggressive approach to tasks as an adult (and my tactful dodging of any “non-necessary” work).  Yet many adults still have tantrums at work (albeit the professional equivalent of a tantrum, a tantrum none the less).  Complaining about your workload doesn’t actually make it lighter, if anything it makes it FEEL heavier, makes it TAKE longer, and makes your boss HATE you.

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But I HATE Scrubbing the Toilets…

“Johnson!  I need you to scrub the toilets.”  Oh, awesome, I LOVE scrubbing toilets!  You may be thinking “if the boss thinks you like it, he’ll make you do it all the time, but if you act like you hate it, he’ll pick someone else next time”.  Yes, he’ll pick someone else… someone else to promote next time he’s got budget for a raise. Guess what, EVERYONE hates scrubbing toilets, and your boss isn’t going to believe for a second that you actually love it, but you’re communicating to your boss that you can be relied upon. If you love EVERYTHING, for a while you may get the tasks no one wants, but in short time the boss will realize that you can be trusted with higher responsibility tasks, and will come to rely on you for dealing with problems.  Bosses don’t want to lose good employees, and a half-decent boss will not react to this attitude by dumping garbage on you, but by instead reserving you for important things and probably pampering you a bit when those “dummy projects” come around that are a lot of miserable work that literally anyone can do. Those types of projects always get dumped on the grumps, because they’ll get it done well enough, and who cares if they quit? The secret is, those who work happier tend to get less work to do, and those that complain about work tend to stay busy. You don’t need to work harder or do the job better, you just need to remember to whistle while you work, get it done fast, do it right the first time, and be consistent. If you follow these rules, then in a short time you’ll either have a promotion, a raise, or at the very least a great referral for a better company that appreciates an enthusiastic toilet scrubber.

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“Quit Making Excuses” and other Worthless Managerial Phrases

Quit Making Excuses

“Why isn’t this report written?”   Because you assigned it to me 6 hours ago and I’ve been in meetings continuously since then.  “You need to quit making excuses”.  So… you didn’t like my honest answer to your question, but you’re still mad and have reverted to cussing?  What do I mean by “cussing”?  Anger words whose sole function is to be unproductive and make ones self feel better in exchange for making another person feel worse is pretty much what “cuss words” were created for.   Words whose sole function is to offend or cause anger in someone.  Words like “quit making excuses”.  You’re not contributing a solution or addressing the employees statement at all.  If you had said “Well screw you then, jerk!”, ignoring the major HR issue, the employee is going to be left feeling exactly the same way: mad at you, under the belief that you can’t manage your employee’s schedules properly, and knowing that when you make mistakes you push it on someone below you.  As a manager, you need to ask yourself, “How would a better employee, provided the same tools and situation, have come to better results?”  If you have an solution, tell them, and reset expectations; when is the new due date, or who are you passing the project to, and how will you avoid this situation in the future.  If no employee could have done a better job, then there’s no reason to go on the attack.  A phrase like “If you had 6 meetings today why did you accept a project with a limited timeframe?” still shows your displeasure, but it’s addressing the problem more directly.  If you want to be a nice boss, something like  “I didn’t realize you were so busy, send me your updated calendar when you get a chance so we can go over it together” accomplishes the exact same thing without putting as much pressure on the employee.  The fact is, most likely, the employee screwed up.  Employees screw up a lot.  So do managers.  Everyone does.  At worst, even if you’ve already given up on the employee and are waiting for them to quit or an excuse to fire them, pushing negativity on them is going to spill over onto their more productive coworkers.

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Just Do It Like I Showed You

As a senior employee and a manager, you want new employees to contribute to the successful chain that your company is using.  As a manager, you can see every step from A to Z and all the complex interactions that occur.  If your new employee is doing L, it is important that they correctly receive results from K and pass them to M in a coherent fashion.  It may be that your employee has found a trick that makes L easier, but if it confuses K and M and wrecks up the whole process, that employee with their “better way” is suddenly the eye of the tornado; a calm surrounded by catastrophe, happily proclaiming “Welp, I did my job!”.   So you retrain all your K’s and M’s to this new method, and 3 months later that new employee quits or gets promoted, leaving you to either revert to the old way or train a new employee on the new L process that you don’t fully understand.  All of these are valid things to bring up with the employee who has found a “better way” (and these are often your brightest and most motivated employees who want to make a difference in the company), but something ineffectual as “We’ve always done it this way” just shows them that the company is mired in outdated or ineffectual methods, and “Do it the way I told you” is just a muscle flex, which tells them “Oh, you’re that kind of boss… how long until you tell me to work 3 hours overtime 5 days a week?”  Discuss this with the employee and try to get them to understand the bigger picture; master the current process of L, try to understand the entire process A to Z, and once you’ve gotten promoted, THEN you can start worrying about revamping inefficient processes…  NOT when you’re new to a position and only understand your own small part.

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You’re Doing Well / I’m Unhappy With You

Employees need motivating.  Work sucks.  You know it, they know it, everyone knows it, and once they get accustomed to that weekly paycheck, they begin to take it for granted.  It’s not a reward, it’s what we deserve.  Most people hate coming in on Monday, and those that sincerely enjoy doing what they do would probably rather be doing it for themselves.  If an employee is underperforming, you want to let them know.  If and employee is doing a good job, you want to encourage it.  However, canned comments may backfire.  Something like “You’re doing well here” is basically the “Doggy want a treat?!?” bone-toss of compliments, and “I’m not happy with your work” is pretty much akin to kicking the dog…  For the enthusiastic new employee on their first week of their first job fresh out of school, this is great news, or a great way to get them to buckle down and clean up their act, depending on the situation.  Once they’ve heard this from 10,000 managers, BOTH come across like “I’m ignoring you”.  What is the person doing well?  How could they do it better?  Employees can eat even the most rancid meat as long as it’s on a nice bun, “I love how you get here early and enthusiastic every morning, but by lunch your work is disorganized and you’re basically falling asleep at your desk…  I appreciate your enthusiasm, but see if you can find a way to balance everything out and be consistent from the time you arrive until the time you leave”

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Just Remember…

You’re the boss, but there’s no need to be bossy.  If you don’t know a better way to do something, you don’t have to hide it.  If someone from the IT department comes up and asks “How do you expect me to write up an entire sprite engine from scratch in one week, and why aren’t we just using SpriteKit?”, you may not have understood a word they just said, but hopefully as a manager you can at least point them in the right direction.  “Let me put you in touch with Jessica on Project X, you can use her as a resource to figure that out”.

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One Person’s Success Is Another’s Failure

This morning Johnson Kee posted What Do You Do When You Want To Give Up, about the less glamorous aspects of succeeding at business, particularly to get used to routine and boredom.  In a world full of unreliable people, being consistent can do a lot for establishing your brand.  So is it possible to be successful and not be bored?

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What is Success?

This depends entirely on your definition of success.  One definition is “Achievement of something desired”.  What if I desire more than maximizing wealth?  Is there any place in business for people who just want to have a blast and be totally awesome?  Sure, there are plenty of millionaire playboys who run around the world spending money and being rich off their huge business ideas, but what about those of us common folks who can’t afford to parachute out of our own private airplanes.  How do we have fun in business without it costing a fortune?  The answer is variety.

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Don’t Cling to the Driftwood, But Don’t Let Go Either

If you’ve started a business and it’s finding some degree of success, but you hate doing it, hire someone to do it for you, sell it, or quit.  Don’t make a life of hugging something you hate, but don’t just let yourself go either. If possible, use it to help kite yourself to something else, or keep a hand on it to get your head above water and have a look around. I’ve started a dozen businesses and most of them have gone out with a fizzle when I got bored doing it.  When I find success, I don’t think of it as “this was my one chance”, I think of it as “This is evidence I can do it again”.

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A Life of Successful Failures

This of course results in a life full of what other people will define as “failures” and “successes”.  There will be plenty of time that you lose a fortune, and times that you do quite well, but if every time you had fun and learned something and met great people, who’s to say that they weren’t all successes?

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What is your definition of success?

Figure that out first, because at the end of the day, nobody can tell you how to succeed, because nobody really knows for sure (or cares) precisely what it is that YOU want. You might not even know yourself well enough to be sure, but what you CAN do is figure out how you’re going to measure success, then just start stacking them up and see where it goes. How do you define a personal success?
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You Can Trust Everyone On The Internet

“Never tell anyone on the Internet anything personal, not even your first name!”  Some have been indoctrinated more than others, but in many web circles, the mere utterance of someone’s name (especially their last name) is enough to motivate users to delete all their posts and vanish from the internet.

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My true name is too long to fit on this page.

 

The paranoia has slowly been relaxing.  In fact, unless you go to some extra trouble, eBay and YouTube will now default to creating a username for you out of your first and last name without asking or confirming at all.  With the advent of social media, we’ve begun voluntarily putting personal information and photos  of ourselves on the internet, either so our classmates and colleagues can search for us, or just to show off and get attention.

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Selfie

 

I used to be horribly paranoid about any of my information getting out on the Internet.  I also used to be 12 years old, and 14.4k dial up modems used to be fast.  “Crazy people will find me and kill me!”  Maybe that’s a bit of my mom talking.  This fear lasted until I had to work a customer service job where I faced all variety of lunatic (many whom were quite angry) with my name printed on a badge my shirt.  I figure the average Best Buy customer can’t be all that much worse than your average internet user, and there are at least as many professions (real estate, law, medicine) where the first and last name of the proprietor are publicly displayed.  If everyone on the street can see it, how long until the internet psychos find out and hunt THAT guy down and wear his face as a hat?

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Now you all know his name, whoever he is.

 

The reality is that, chances are, most internet users will never get enough attention to become targeted by [Internet Group Of Which We Do Not Speak], and the reality is that it only takes one person who really really hates you to ruin your week, so being paranoid is needless.  People on the internet are still just people.  A lot of them are weird creeps, sure, but that’s people, and the same rule goes for people you walk past on the street.  The odds of someone on the street randomly stabbing you for no reason are still a LOT higher than the odds of someone stabbing you in the face over the internet (patent pending).  If the crazies are gonna get ya, they’re gonna get ya, whether or not you protect your name.  The paranoia that you may be standing behind a psycho in the checkout aisle shouldn’t make you any more or less hesitant to introduce yourself.  After all, what’s the worst that could happen?

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Could you send down someone from tech support? My key cleaner seems to be broken…

 

I Christen Thee…. Umm…

I have struggled through a lot of bad ideas.  I can spot a scam from a mile away, mostly because I’ve already tried most of them.  I’ve earned $5,000 dollars from home, I’ve lost 50 pounds in 3 months, I’ve taught myself to play guitar, I’ve lived abroad and learned a foreign language, and I’ve earned my certifications in only a couple hours a week…. But guess what, I’ve also lost the money, put the weight right back on, forgotten everything, and all my certifications are currently expired.

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In the last 10 years, I have made it my goal to be able to earn a living substantial enough to support a family while working from home.  I barely saw my dad when I was growing up, and even though a lot of what he did from about 6am Monday to 7pm Friday was for me, I didn’t see or appreciate it.  For a million years we have followed our parents around, and the fact that we now barely see our children is a crime  (This blog is not about children).

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They ARE totes adorbs, tho…

 

The first post of the blog seems like it would be the most important.  It sets the expectations for the intrepid early adopters who first discover it in its natality, and sets the boundaries for the limited frame of reference that the blog poster will be using in each and every post.  For example, if the first post is about cats, it’s assumed that EVERY SINGLE POST that follows will be laden with cat images and references and rants about cats.  Here is the first and only cat that will ever be posted on this blog:

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All Cats Need Captions, No Exceptions!

 

The problem with introductions is that 99% of it is lies.  It’s always the same, “Hi, my name is Steve” (truth), “I’m 32 years old and work in software design” (depends on the person), “I’m good at this and I’m always on time and I love XYZ” (mostly what you WISH was true about you, but quite often is not).  The same goes for blogs.  We want to get off to a good start, but even with a bad start, 100 posts from now, very few people will dig back, and what they find won’t impact their feelings.  We’re (thankfully) most often known for what we’ve become and what we’re doing, not how we got our start, because most of us got our start pooping ourselves and crying a lot.

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Things can only get better from here…

 

When you meet someone, you can say whatever you want to about yourself, but in 2 weeks of working in close proximity, people will have a pretty good idea that you’re always late, you don’t like to shower, you lose your temper easily, and you spend most of your time arguing with someone on your cell phone or trying to find an excuse to fiddle with something that you swear is “work related” but has far too many pictures of swords to truly be productive.

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People average 3 lies within 10 minutes of meeting someone new. It’s on the internet, therefore it’s a fact.

 

First posts, like introductions, are in fact the least important part of the getting-to-know-you.  A blog writer is only as good as their most recent 2-3 posts, and likewise a person is only as good as their most recent 2-3 interaction with you.

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Goes for about everything.

 

What’s important in both is simply that you have a purpose.  A personal mission.  One that you can accomplish without requiring praise from others.  I was raised by a mother who told me that everything I do is fantastic, and to this day in many of my artistic and creative endeavors I find myself seeking this approval from others.  The reality is that while Mom sees all my strengths, the rest of the world sees primarily my weaknesses.  Mom knows me better than pretty much anyone else, and of course I know her pretty well too…

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There needs to be a better way to teach 4 year olds how to properly use apostrophes…

 

I don’t feel like I have any special lecture or information to teach, but I find a lot of people asking me how I do things or saying that what I’ve done is interesting, so the next time someone says “how did that work out?” or “How did you do that?” I can point them this way, where my thoughts are hopefully a little more organized and coherently laid out then they are during one of my classic rambles.

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You see, the thing of it is…

 

 

In summation, I’m going to make this blog because I want to, and I’m going to leave deciding how to use it up to you.