When Is A Good Business Model A Scam?

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Last Sunday I went to the Nebraska State Fair with my wife and 2 girls.  While walking around I came across a interesting “booth”.  Had a great eye catching headline of “Are You Going To Heaven?” with a nice red FREE sticker on the side. After eavesdropping on a couple people while waiting for my wife (and 2 daughters) to return from the bathroom, the gig is this. He asks you 2 questions. 1) What is your deepest darkest sin? and 2) Do you accept Jesus Christ as your savior?

After you answer those questions he tells you for $50.00 he will tell you if you will go to heaven or not if you passed away right now.

He needs to work on his scalability a little bit cause there was a line of about 15 people deep to talk to him but in the 20 or so minutes I was around I only got to witness 5 people go up there and talk to him. Out of those 5 people I only saw 1 person pull out money. By her reaction I am guessing she was told she was going to heaven…

No idea if a 20% conversion is high or low for him but if that was his average then he *could be* pulling in $150 a hour or $2,000+ a day. Not to shabby.

Is this a scam? Or just a REALLY good business model?

It’s not like you can get a refund if he is wrong!

5 years ago when we were planning to have our first child I came up with a interesting idea for a website. The basic concept was this:

There is a time from when you get pregnant until you can find out the sex of your baby. I forget what the exact time was but look it up if you feel the need. Anyway there are a ton of people out there who just got pregnant and are caught up in baby fever and want to know if they are having a boy or a girl. So I thought it would be cool to make a website that would predict the sex of your baby. You would answer all kinds of questions (it didn’t really matter what you said) then at the end it would charge you $49.95 to get the results mailed to you. For a extra $10 you could get a 100% money back guarantee.

So the model works out that you would be right about 50% of the time just based on the law of averages and you could even develop a algorithm over time based on reader response to tweak your percentage (or at least attempt it). Your refund policy (for those who bought the insurance) would state that you have to get a copy of the birth certificate mailed to you within 5 days of the birth of the child. Do you really think the biggest thing on peoples minds after they have a kid is getting their $59.95 refunded cause you got the sex wrong? Maybe…. but I doubt it…

Now I never built this service but think it would be VERY profitable. Would it be a scam or a REALLY good business model?

117 thoughts on “When Is A Good Business Model A Scam?

  1. Nanovor

    That Boy or Girl idea is great. It seems scammy, but if you covered all the bases it could be a really good business model. You could easily branch out into other things that have a 50% chance of right or wrong.

  2. matt

    I wrote a site a bit like this, except I don’t charge like that. I get the idea but I don’t know how many people would actually pay!

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  4. ZK @ Web Marketing Blog

    ~ : POST OF THE LAST TWO MONTHS : ~

    Yes this was really an awesome post and I must say that this is really high class with sharp business mind with in depth analysis about business and human psychology …

    Standing clap … you deserve for this post Jeremy.

  5. Byrne

    There’s nothing wrong with creating a site like this as entertainment. But the most it sounds like science, the more it sounds like a fraud.

    Although the idea of a money-back guarantee on a 50-50 guess has a lot of potential. If you wanted to be really slick, you’d tweak it for investment newsletters: “I will predict which direction gold moves tomorrow — or 150% of your money back!”

  6. Mohamed Egyptian

    the right business model should have one of these three goals :
    increase the quality of life
    right a wrong
    prevent the end some thing good

    if a business model not have one of the three goals so we are make money without a meaning and the business model will fail at the end – but if we have a business model that achieve a meaning we would make money and grow up

    1. The Affiliate Marketer's Help Desk

      @Mohamed Egyptian
      You’re right about what a business model should do – and I really can’t see how this guy is doing it. Maybe if he wasn’t charging people – I could see it as a ministry/mission to help people come to grips with their faith – but because he’s earning $50 a pop – I’m sorry that’s just wrong!

  7. Chris Robbins -- the domain wizard

    I agree with Brad. Or else I’d lover the price. Make it 20 dollars with 5 insurance so they don’t feel that cheated. I mean it is essentially a carnival game just like those guess our age/weight booths and ou pay for those. Or maybe intead of the refund you could offer something that either doesn’t cost you anything or very little.

  8. nj

    Hi shoe,

    That’s kinda strange? The people should read the Holy Bible, and ask Jesus Christ to save them. John 14:6

    When I hear someone claim they don’t believe,

    Have they ever once diligently started seeking him?

    Can one see what Love looks like?

    Does Love have wings? Does one experience true Love, and not believe it’s real?

    Can one believe the wind, and gravity is real or not? One has free-will, But if they claim not to believe,

    The wind will still blow, and they shall continue to dance in what they call gravity…

    Kind Regards,

  9. The Affiliate Marketer's Help Desk

    I think the fact that you considered providing a way for people to get their money back alleviates the scam factor for your idea.
    But but that guy’s service you were describing is not only a scam, but an absolute shame! Somebody better pray for him, because what true believer would ever exploit something like that. I’m appalled and I really hope he comes to his senses real soon.

  10. Geiger

    What people are looking for is “Ease of Mind” if you provided them that, then you’re fine.I think you could increase your refund policy because after having a baby, I doubt that you would send this in in the first month.

    1. Chri Robbin

      I don’t know if taking a quiz to find out the sex of the baby would ease anyone’s mind. I think it would mostly be done out of fun so obviously you would need a disclaimer that claims it is for entertainment purposes only. I think if you had an incentive it could work. Offer a small gift which they get to keep whether you were right or wrong. It offers value and an incentive.

    2. Gregg

      I think people who want to know their baby’s gender in advance want to buy certain types of toys and clothing to match that gender.

      So taking a company to the cleaners over a false $59.95 prediction might make sense if they’ve (foolishly) bought hundreds or thousands of dollars worth of gender specific baby stuff based on that prediction.

  11. TheCakeScraps

    A SCAM is if you are selling something you know is fake. Even designer clothing is safe because they have a reasonable argument as to why people should pay more for their stuff.

    In this case, you have no basis to say what gender the kid is. It is just a 50/50 shot in the dark. To me that sounds like a scam because you are presenting the appearance that you have knowledge but in fact don’t.

    Even so called fortune tellers have to pay attention to body signals to look semi-legit. You idea would be even worse than that. Not saying you cannot make money, just saying what people will think of it.

    Verdict: SCAM (on both accounts)

  12. Power Colon Cleanse

    Scam! 5 days for refund is just wicked… you are intentionally trying to screw them. Now if it is 60 days (most parents still wont go for refund) then you are providing them with a legit chance at their money, and so it would be acceptable in my eyes.
    Good concept either way!

  13. Purple Martin House

    Yeah, I feel like this would be a scam considering the fact that as others have said, you are presenting something as though you have secret knowledge based on their responses that would determine whether they were going to have a girl or a boy. In fact, you don’t, and therefore that is fairly misleading. Just my point of view…

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  15. Allen

    If you want to make it even more awesome make them answer a series of questions that make it seem more legit (what time of day was the baby conceived, how many brothers/sisters do you have). Then include in those questions, what do you want (boy/girl) and always answer which ever one they preferred. Now you’re really providing them some happiness because they believe their getting what it is that want. That has to be worth a few bucks.

  16. Bryan

    Why not offer a 100% money back guarantee for all wrong predictions (don’t bother with the $10 extra bit).

    For every 100 customers, you’ll collect $5000, and be wrong about half the time. Of the 50 where you were wrong, I bet only 15% will actually bother requesting a refund, but even if all 50 did, you still pocketed $2500 (+ up to 9 months interest).

  17. Dave

    Ok, I’m gonna call BS on this story. No offense shoe. First off, it says “FREE” right on the booth in the background. Second, I find it extremely hard to believe that at what looks like an outreach ministry, they are selling the ‘answer’. I think you might have fabricated to story to try and weave in a lesson here, but this one is too far fetched.

    1. Jacob

      This booth is based a standard evangelism tract used by many churches. I have seen it used a dozen times, and no money is involved. The only trick is the second answer.

      First question: “Do you believe you will go to heaven when you die?”

      If yes, second question: “Why do you believe this?” The second question has a series of choices and a “none of the above” option.

      None of the answers given matches the gospel message in the Bible, but each represents a common “qualification” that many people believe should get them to heaven. “I’m basically a good person,” or “I go to church.”

      There is even one distractor designed to catch the unwary fundie out there: “I believe in God.”

      The Bible says “Believe (trust) in the Lord Jesus Christ and you will be saved.” Believing in the existence of God is not a qualifier.

      I also very much doubt that this person was charging $50 for that answer. If there was mention of a $50 dollar fee, he was probably using it to make a point, rather than to actually collect it.

  18. Adam Baird

    Call it whatever you want. I have no problem with it.

    I mean does anyone actually believe this guy knows whether or not they are going to heaven? If you’re dumb enough to believe that you deserve to lose $50.

    Most people would know this is ridiculous and if they pay for the service, they’re paying for entertainment…which they are receiving. Not a scam IMO.

  19. iphone classified

    i guess it depends on how you look at it.. sure you are providing people with a “service” they would appreciate obviously, because they paid for it…

    should you feel bad about it? Well depends if you think you are cheating people out of their money or simply taking it away from people that are stupid..

    fortune tellers, astronomers, and a million other idiots swindle people out of their hard earned cash face to face everyday….

    eh screw it just donate some of the monies to charity if you need to feel better..

  20. Matt

    I don’t agree with morally questionable business models, but if you were to do the baby prediction thing you could also CYA a bit more by giving them a % chance as an answer, something like – “Based on your answers, there is an 85% chance you are having a boy”

  21. Social Bookmarking

    Morally it is a bad business but like the car business says, “There is an ass for every seat.” Is selling diet pills a good business model? Ask the multi-million dollar companies if it is. It is all about where you draw the line in your business ethics.

    By the way, I have seen tons of these baby result sites too! Obviously, it is a decent business even though the morals of it is horrible at best.

  22. hackcorp

    Interesting. One friend asked me to build him a website based on the table that he found in a newspaper that tells if it would be a boy or a girl about 4 years ago. All he wanted is a simple form that users filled in to get the answer for a small fee. Then he changed his mind, however, I believe they already have this kind of services for free, plus if you google it, you would probably find the articles themselves.

  23. Sensei

    Well I think it’s not scam because it’s very obvious that you can’t predict it. For me it’s the fault of the people who don’t get it that they are paying for a prediction which can’t be predicted

  24. Matt

    You know what else is a scam… the guys in CNBC telling you what stocks to buy. They have just about as much of a clue as the guy in the magic box from this post.

    I think he would have made a lot more if he let the people ask the questions, then he give a yes or no. bigger the question the more money

    will I go to heaven? $50
    will I have a baby boy? $25
    is my boyfriend cheating on me? $10
    Will they ever find the body? $5

  25. Mikey the Fish

    Haha.. would it really work? ehh.. I don’t know if the price point is correct but hey.. make-money-online ebooks sell for that much, why not this. and I would agree you would have to give something of value.. maybe spend the extra 50-100 to design a nice template for a boy & girl and they get it mailed to them or something so they actually received something. then the refund policy would be to send the certificate you sent them back, as well as copy of the baby birth cert. and then give them 100% refund.. could work towards other models as well.. a buddy and i made something that functions like this for a divorce court law here in florida.. runs about the same, 50 pricepoint, but its required by florida law to have passed this class.. but the functionality would be the same.

    cool idea

  26. David Z

    Mr. Shoemoney, what you propose has certainly lit a big light bulb in my brain! :)

    I have a quick question though, in your last post relating IM to hold em, you said you wrote a lot of scripts to record and analyze poker player interactions. Since I’m new to programming, can you please be kind enough to tell me what language you wrote those scripts in, so that I can learn which language the legendary shoemoney codes in? Or which language do you suggest?

    Thanks a lot for the advice.

    Have a good day.

    David

  27. James

    There is only one additional question to ask your self to decide if it’s a full fledged scam:

    Is there a rebill in tiny print about $60 a month even though the squeeze page says free 5 times.

    Give it a shot and if it get big enough congress will answer your question.

  28. Trigeia Twins

    Thats a great idea, My Twin is having a baby in Jan. and they find out the sex this friday. I know that has been a topic of discussion for quite some time around the house. Hum, Maybe we will build this website :) What a great idea and it would also get a lot of press. However, i think the business model is a better idea then just the website concept. Awesome!

  29. Paul Norwine

    Ha – great question! Intellectually, I think it’s a great business idea. Emotionally, I may have a slight (very slight) misgiving when I think about taking their money over something that I didn’t really help them solve…but as one of your other commenters noted, (1) they have the option of a full-refund and (2) they would (or should) know that it’s for entertainment purposes. So, I’m going with a great idea :)

    Paul

  30. Bluetooth Douchebag

    I think if people are stupid enough to buy into that then they deserve to part with the money. Why do you think fortune tellers are still around? No refunds there based on fairy tales.

  31. Eat My Shorts

    I do not think it’s a scam, you are getting what you pay for and if you want the insurance, you MIGHT get it all back.

    As long as the “guess” is mailed to the person, there isn’t any scam involved IMO.

    Nice site idea….who will be the first to get it going now lol

  32. Joel Gross

    I actually am testing this theory myself: I built a website (prayer-helpers.com) that sells prayer services. You pay $10 and someone will pray for you and send you a personalized email. What do you think? Do you have any advice for me?

  33. Gary

    That is just plain good business. The people who say it is a scam are the fools who are too afraid or simply horrible at doing business a.k.a. “The Haters”. Any rational, objective person would see the business for what it would be, a novelty item or service. I wish you would have done it Shoe so I could hear everyone cry and complain about it. These people disgust me.

    1. Ben

      Why is this a scam? How is it different from all the mobile “IQ quiz offers” and “someone has a crush on you” offers that’s sole purpose is to trick you into putting your phone number in so they can charge you $9.99 a month for nothing.

      As long as there is a disclaimer, it is not a scam. You are not forcing or tricking anyone to do anything. You’re simply “PREDICTING” what sex their newborn child will be.

      1. Ulrich

        These mobile IQ quizzes or ringtone things are also scams (most of the time) and people do not read disclaimers.
        Now you can just say that this is their fault and not your problem as long it is legal, but this will show how much you actually care about other people..

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  35. Online Income

    Very unique. Another twist may be allowing expecting mothers to put in a list of names. Then friends pay $5 per guess for the name and sex of the baby. The winner who gets the name and sex right gets 50% of the pot… the site gets the other 50%.

  36. Kelly

    Definitely an interesting business idea you have come up with their about the sex of your baby. I’m sure someone will run with that idea now :). I wonder how much that guy who tells you if you go to heaven or not makes in a day…

  37. Needmoney.com

    Well, y’know. I guess that soon-to-be-parents go googly-eyed and do all sorts of dumb shit. My question would be more like, are people really that stupid?

    Sadly, I’m not sure that the answer to that question is “no”.

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  39. Andrew

    This remind me an old story from China. Long time ago, (Hundreds if not a thousand years ago), there is a fortune teller who predicts the result for those candidates of Scholar (just treat it as an Exam). The trick is he told all the candidate that they will fail the exam, which actually only 1 out of thousands candidates will success and become Scholar. and even if THE candidates success, it will be the biggest news for him and I don’t think he will remember this fortune teller…

  40. monitor riser

    Scammy, but not a scam.

    So long as it’s legal, it’s the USA…..you can take what the market gives you (and yes, people would be sending you cash), so long as you can sleep at night.

  41. Jonathan Drain

    The baby naming service is a scam. You’re selling information that you don’t have. It’s deceptive.

    The religious salesman is a more reasonable case. The requirements for entry into heaven are straightforward, at least according to some religions. His trick is bumping up the price once he’s created demand by making you think it was free – shifty, perhaps, but you know what you’re buying before you’ve paid.

    Take the ‘Free’ sign away and he’s just selling information at an inflated price using heavy marketing.

  42. purposeinc

    The new site design kicks ass. Great graphics and things for your mind to wander around as you go.

    The last two posts have been absolutely world class! Well thought out, informative, thought provoking, and just plain old badass!

  43. Kevin

    For the record, I appalled by the booth described in this article. But people using religion for personal profit is nothing new.

    I’m not upset with Jeremy–I’m upset with someone who would set up that kind of booth.

  44. Andrew | TrailerUnleashed.com

    wow. The new design is amazing. Great job.

    1992-2009 – 1992 ?? Also you could add a twitter button near the rss one. They’re small but pretty visible.

    Also, when you have a log in box, shouldn’t you have a “Register” link somewhere around the log in box ?

  45. fas

    The idea is kick ass, it wont be a scam but it wont be like a real good deal either. I doubt how much it will convert anyways.

  46. Faisal Anwar - Faicash.com

    I believe if you think you’re lying to people or hiding certain things from your customer, than that’s scamming. But nowadays every business is somewhat shaddy. You can make money being 100% truthful
    Oops…forgot to say great post! Looking forward to your next one.

  47. Blake @ Props Blog

    It is technically a good business model. You provide the product that you claim to provide, and as long as you refunded people who followed your refund policy, you aren’t scamming from a BBB perspective.

    On the other hand, you are offering an unethical product that doesn’t really provide value to the customer (hello palm readers/psychics).

  48. Freelance Noor

    I would have liked to know the answer about where shoe money will end up. Heaven or Hell .particularly after enjoying and photographing Playboy mansion and pretty nude girls.
    The business model would have made shoe money some criticism. I dont think the idea is worth.. But you know better.

  49. anecdote

    The sex ratio is commonly assumed to be 105 boys to 100 girls born. So if they choose boys every time they will make money over time. This is nothing more than a ponzi scheme.

  50. Martin

    A couple of things. Would you feel good selling it to your parents, or you neighbors? If you would then it isn’t a scam as you would define it. If you wouldn’t feel good, it might well be a scam. Second thing. A business following either of these models is unlikely to bring very much when you sell it. Despite profitability, most prospective buyers would run away.

  51. Sergey Rusak

    Jeremy, it is the funniest idea I ever heard about!!! You are right, 50% it will work. You know, no it is not a scam.
    You know, psychic business model. Most people go just for fun or unsure. 90% of them leaving psychic saying “bu****it!” but other 10% think “Wow, he / she is right” and they become regular customers. I mean, psychic is no a magic, it is more like social worker.

  52. Dustin Pearson

    goodness…scam…religion in general. it is a great business model…a product you can not touch, see, or hear. You can claim it does everything for you. And blame whatever you want on it. ultimate scapegoat for life in general. Then you get people to pay you to tell them all that jazz. And you are tax exempt! Wow…I should be a minister. Anyhow…at least on here you can get free shirts!

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  54. Joseph

    Your idea is similar to my Monday Night Football Guaranteed Winner site (coming to the Internet sometime soon).

    For $100 I will give you the winner (vs the spread) of every Monday Night Football game this year. I’m so sure of my predictions that I will give out the first two games for free.

    Of course 1,000 people will sign up for my service. For the first game I tell half of them to bet on the home team, and half to bet on the visitors.

    I still have 500 people for week two. I do the same thing in week two, telling half to bet on the home team and half the visitors.

    I now have 250 people who think I am a football god and they gladly pay me $100 each, and I make $25,000.

  55. Free Business Cards

    Hmmm I think I have an Idea,
    “Do you Have Nice Breasts? Two Question Test Reveals Answer!”

    Sound good? I don’ about profit but 1 visit a day would be a good enough conversion rate… oh and they better be female!

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  57. Chris Peterson

    Hi Jeremy,
    That “refund if you go to hell” stuff was really humorous?
    Btw, what made you think of it, huh?

    Personally I think the description of your business model was workable, few years back. LOL!

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