5 ms·

It is kind of awkward that a business that exists to help you get things done is paid whenever you fail.

falcolas 9y ago
This is effectively the business model of every health club out there. They lock you into a 1 year contract, knowing most people will not continue past the first or second month.
- dpatrick86 9y ago
  In that case, the only incentive they have for you to fail is to pack more gym memberships in the same square footage. Still, I think as a perverse incentive it's a lot more indirect.
  - mrisoli 9y ago
    Exactly, while they can benefit from having fewer people go regularly to offer a better experience to those who do, churn is still a gym's biggest problem, it's why they lock up longer contracts and why gyms have trainers available and regular progress reports, to enhance customer LTV.
jstanley 9y ago
That's also the business model of most dating websites.
kbutler 9y ago
Doctors and pharmaceutical companies are supposed to help you be healthy, but make more if you're ill long-term. Banks, credit card companies, and brokerages all make more money if you make poor financial decisions (fees, interest, and active trading, respectively). Auto mechanics and car companies make money if your car doesn't work or doesn't last past the warranty period. Even piano teachers only make money if you continue needing lessons, rather than becoming able to learn on your own. Hopefully enlightened businesses will follow the model that customer referrals are more scalable than bleeding the money out of any one individual.
- dumbfounder 9y ago
  You aren't making a case for, you are making cases against all these other industries.
- nck4222 9y ago
  >Doctors and pharmaceutical companies are supposed to help you be healthy, but make more if you're ill long-term. Which results in unnecessary procedures, and unnecessary prescriptions. >Banks, credit card companies, and brokerages all make more money if you make poor financial decisions Which caused the housing crisis and great recession. >Auto mechanics and car companies make money if your car doesn't work or doesn't last past the warranty period. Which results in some of the most untrustworthy salespeople in one of the most untrustworthy industries. All of those industries are regulated by the government, precisely because the incentives are wrong and it causes people to do more harm than good if left unregulated.
  - wuliwong 9y ago
    I was able to find a trustworthy mechanic. If they did a poor job or were sabotaging my car when I brought it to them, I would choose another mechanic.
    - nck4222 9y ago
      My point is those fields need extra regulations because there are incentives that promote unethical behavior, and thus shouldn't be used as examples of why this websites incentives are good business practices. Not that there's no such thing as a trustworthy mechanic.
    - throwawaydjdo 9y ago
      HN is ridiculous. If a mechanic sabotages your car, you can sue them... you know, a service provider by the government. But what if your town has only that one mechanic? What if the mechanic is worth billions and bought the other smaller shops just to shut them down? Do keep in mind that sometimes there is no competition, or the incentives are so perverse that competition doesn’t matter. The world isn’t black and white. Despite what Ayn Rand might’ve told you, you can’t just expect competition to fix literally everything. Hackernews is supposed to have smart people, but the pithy nonsense like the parent I’m responding to makes it abundantly clear that that’s not the case.
iamwil 9y ago
But in this instance, that's the incentive. You want that money back, rather than going to someone else.

This is effectively the business model of every health club out there. They lock you into a 1 year contract, knowing most people will not continue past the first or second month.

dpatrick86 9y ago
In that case, the only incentive they have for you to fail is to pack more gym memberships in the same square footage. Still, I think as a perverse incentive it's a lot more indirect.
- mrisoli 9y ago
  Exactly, while they can benefit from having fewer people go regularly to offer a better experience to those who do, churn is still a gym's biggest problem, it's why they lock up longer contracts and why gyms have trainers available and regular progress reports, to enhance customer LTV.

jstanley 9y ago

That's also the business model of most dating websites.

kbutler 9y ago

Doctors and pharmaceutical companies are supposed to help you be healthy, but make more if you're ill long-term. Banks, credit card companies, and brokerages all make more money if you make poor financial decisions (fees, interest, and active trading, respectively). Auto mechanics and car companies make money if your car doesn't work or doesn't last past the warranty period. Even piano teachers only make money if you continue needing lessons, rather than becoming able to learn on your own. Hopefully enlightened businesses will follow the model that customer referrals are more scalable than bleeding the money out of any one individual.

dumbfounder 9y ago
You aren't making a case for, you are making cases against all these other industries.
nck4222 9y ago
>Doctors and pharmaceutical companies are supposed to help you be healthy, but make more if you're ill long-term. Which results in unnecessary procedures, and unnecessary prescriptions. >Banks, credit card companies, and brokerages all make more money if you make poor financial decisions Which caused the housing crisis and great recession. >Auto mechanics and car companies make money if your car doesn't work or doesn't last past the warranty period. Which results in some of the most untrustworthy salespeople in one of the most untrustworthy industries. All of those industries are regulated by the government, precisely because the incentives are wrong and it causes people to do more harm than good if left unregulated.
- wuliwong 9y ago
  I was able to find a trustworthy mechanic. If they did a poor job or were sabotaging my car when I brought it to them, I would choose another mechanic.
  - nck4222 9y ago
    My point is those fields need extra regulations because there are incentives that promote unethical behavior, and thus shouldn't be used as examples of why this websites incentives are good business practices. Not that there's no such thing as a trustworthy mechanic.
  - throwawaydjdo 9y ago
    HN is ridiculous. If a mechanic sabotages your car, you can sue them... you know, a service provider by the government. But what if your town has only that one mechanic? What if the mechanic is worth billions and bought the other smaller shops just to shut them down? Do keep in mind that sometimes there is no competition, or the incentives are so perverse that competition doesn’t matter. The world isn’t black and white. Despite what Ayn Rand might’ve told you, you can’t just expect competition to fix literally everything. Hackernews is supposed to have smart people, but the pithy nonsense like the parent I’m responding to makes it abundantly clear that that’s not the case.

iamwil 9y ago

But in this instance, that's the incentive. You want that money back, rather than going to someone else.