Over the last few months we’ve seen the rise of a new and highly controversial kind of website that focuses on “Entertainment Shopping” — online stores that offer customers goods with very steep discounts, but with some risk involved in the shopping process. Some have likened these to gambling or scams, while others consider them auctions. In any case, it’s only becoming more popular, and now there’s a startup called SevenSnap that’s bringing Entertainment Shopping to the iPhone.
The app isn’t out on the App Store yet, but the company recently released a video (embedded below) that shows it off. Here’s how it works: every 60 minutes, SevenSnap puts a new item up for grabs (the example in the video is a Macbook Pro). If you want to have a shot at purchasing the item, you need to purchase “time credits”, which run a dollar per minute. Once you’ve done that, you can jump into the sale room, where you’ll get to watch as the item’s price drops every second (depending on how many people are in the room, it can drop by as much as $100 per minute). At this point it’s a game of chicken — the longer you wait the lower the price goes, but if someone pulls the trigger and purchases it then the price jumps up to its starting amount for everyone else. Remember, you’re paying a dollar per minute in the room, so whenever it resets you lose out on a few bucks.
SevenSnap Sneak-Preview (EN) from Tobias Hieb on Vimeo.
SevenSnap could be fun if you have cash to burn, but it’s not hard to see why people have issues with this kind of shopping site — If SevenSnap were to arbitrarily reset the prices of its items without actually selling them, it could effectively collect money for nothing. The startup may well turn out to be perfectly honest, but until the company has built up a reputation or there is some regulation involved, caveat emptor.
Other startups in this space have met with similar concerns regarding fraud, and are taking steps to make the process more consumer friendly. One of these is iBidCondo, which uses a somewhat similar model to auction off housing. We looked at the site July, when I (and a number of readers) pointed out some potential problems. In light of these concerns the site postponed an upcoming auction so that it can revamp its system to introduce more transparency.
The biggest name in this space is Swoopo, which uses the ‘falling prices’ model but has a much greater variety of products that are on sale simultaneously. The site recently introduced a new feature that negates some of the risk involved — even if you lose out on an auction, you can apply the money you’ve used to bid on it towards purchasing the product at its normal retail price. If you were only going to buy the product because of its incredibly low advertised price then you’re out of luck, but it’s definitely better than the old system where you would always walk away empty handed when you lost an auction.
It might do well. I can’t remember how much money I wasted between 1999-2001 on Ubid / Ebay. I wasn’t paying rent, and loved gadgets. It didn’t dawn on me that smart retail/online shopping was a better alternative.
apple wont approve this
why? what rule does it break?
Agree – I doubt that Apple will approve this .. but the way they (Apple) run the approval process anything is possible.
What rules does it break? When does that matter for Apple to deny a product space on the app store?
Yeah!!!! Very useful tool from Google because avoiding traffic on the highways during peak hours is really a tough job, but Google has cracked that too. In a way, it would be a remarkable tool in the hands of users.
Entertainment shopping is useful to people who love fun, gambling or scam and is written for too rich people. Some use it for auctions. The different move by Sevensnap is good..but the methods used in this app such as 60minutesgrabbing scheme is not reliable to all. We shall wait and see if does Apple approves this app!
The business preys on those with addiction problems, but it seems legal and is brilliant. It models a classic prisoner’s dilemma and represents a step toward more efficient markets. As long as they are transparent about their business practices and honest vendors, I don’t have any problems with this idea. That said, they must guarantee that should a user end an “auction” and NOT purchase the item, all participants will receive refunds for the time spent in that auction. If there is oversight in this area, and proper information regarding product warranties/etc., then I say let it happen.
These type of auction site are extremely interesting. They just need to overcome the perception of being a scam, either through public education or through some sort of regulation.
Not at all, SevenSnap is just for fun. I doubt the approval of SevenSnap. Even if it happens so SevenSnap would not survive long.
Looks fun. This really adds to the game-like elements of live auctions…
How cool would this be in a real life live auction?!
i agree. swoopo has an aggressive customer monetization model that could have some backfire.
on another note, i wonder what “shopping” businesses will end up winning with twitter’s API.
You guys REALLY think Apple will approve of this after seeing THIS!! I dont know about you guys, but If I were the head of a company called Apple and I wanted to sell my products at the price I want at my own store, rather than have someone else sell them and lose business, then I would approve of this! I know what your thinking, that “so what! if people sell Apple products on other places, doesnt it still mean Apple is making money” well not necessarily! It all goes into statistics, and if more and more people end up going to other places then the Apple store and Macworld, then what good will that do for the Advertising and commercializing of their products!
LOL I totally got a huge typo on this! I meant to say I WOULDNT approve of this not that I WOULD! Damn, cant edit comments!
There’s no law against reselling products, and any secondary market shouldn’t result in brand dilution if the products sold are legit and there is transparency in the fact that it is a secondary market. In the end, SevenSnap will still buy the product from Apple at retail, so Apple gets their money at the price they set. SevenSnap can afford to sell at discount because they charge a rake during the “auction” in the form of “time credits”. If anything this could potentially result in Apple selling more product, so I don’t see why they would have an issue with it. That said, SevenSnap could still sell other products. They aren’t only selling Mac.
I love your passion!
!
These “making money fast” sites like auctions and this die out very fast.
1) Competition. Every time this kind of a thing pops up there will be like 10-15 look a likes that might not play the game fair, thus they scam, and people fall off from every site.
2) Coders. You really think coders don’t like these sites?
They love it. They cooperate and scam the sites out so fast that most of them go down pretty fast.
Seen this kind of stuff in my home country with same kind of sites. Coders are always one step ahead and will always cooperate and will. Hell, they even share their ways with their friends and take the stuff home basically for free.
You obviously don’t understand the concept. In order to participate in an “auction”, one must pay a rake. So even if you flooded an auction with bots and bought the product at $.01, you would probably still have lost money on the rake that all the bots have had to pay. Furthermore, the inclusion of even one real user will destroy a scam strategy as a real user will most likely buy at a price > $.01. I’m sure SevenSnap has had at least one mathematician calculate the optimal fee for “time credits” and product devaluation in order to guarantee profitable returns. The only entity that can truly scam is the operator itself – through ending auctions prematurely and collecting rake without actually buying/shipping product.
Yes, there may be competition, but first to market and excellent costumer service mean a lot. Let’s see how they do.
Have you ever heard of one of these making major bucks?
No? Maybe one or two.
Stick to real business. Even Twitter can make a lot more in the long run.
And you clearly underestimate coders. They always crack the systems and milk them if one starts to make a lot of money. The same way they milk casual users.
This concept is groundbreaking, so no, I’ve never heard of a business model like this making money. That said, if there are no legal obstacles, I’m optimistic about their long term prospects.
The buying and selling of physical goods is real business. Your comment about Twitter is ridiculous. They have NO business model. They DO NOT sell anything.
Again, you clearly don’t understand the concept and have no idea what you are talking about in regard to “coders”. A user MUST pay in order to participate. I’m sure the company has worked out the math to ensure profitable returns, meaning even if an auction was gamed to result in a low purchase price, the company will have made profit off of the rake they charge users to participate in the auction itself.
I’m done with you. You are an idiot.
Come up with names with such model that has worked and has not turned into fuck-fest?
Ebay, amazon etc. sellers don’t count.
Have fun figuring out the names.
I have seen such sites on many occasions. They go bust quick after getting famous and drawing users – when this happens there are plenty of people who copy their site.
Even fucking betting sites make close to nothing.
What are there joke sites worth compares to solid players like eBay, Amazon or Yahoo? Nothing.
Bwin and Betfair are players, but they are worth nothing compared to big players – too much competitions.
I’ve seen plenty of such sites. Selling stuff in Europe.
Went broke or are very small and unknown players.
If their business plan is so solid I want to see them compete vs ebay, amazon for example.
They aren’t even known unlike Twitter.
Bye-bye idiot. Go search gold
I’ve seen plenty of such sites. Selling stuff in Europe.
Went broke or are very small and unknown players.
If their business plan is so solid I want to see them compete vs ebay, amazon for example.
They aren’t even known unlike Twitter.
Bye-bye idiot. Go search gold
Now I know for a fact that you are an idiot.
1. Online gambling is a multi-billion dollar industry … and growing.
2. Why are you comparing this site to sites like eBay, Amazon, and Yahoo? Not only are they different, but those companies have been around for over a decade.
3. I challenge you to name multiple sites with similar business models to this one?
4. Again, what does any of this have to do with Twitter?
5. What are you talking about?
Twitter in the long term will be worth much more than you can even imagine. It is more popular and will be worth billions.
Online gambling is
1) illegal in many countries. including U.S for poker
Take the legal part of the business and you are left with what?
For example Partypoker owner Dikshit is worth 1 billion.
That’s not much.
Yeah sure there is a lot money in gambling, porn and so on, but they are small players. All of them because it’s very competitive and losers like you think they can earn a lot of money fast.
2. They have been around for a decade and made money how business is done. Brick and mortar. Nothing more. That’s it.
3. Multiple auction sites. Plenty of them around. All I know are done by now because they all got scammed out of their products.
4. Success in real business = real money.
5. Want to bet how long this site will operate? I will give you less than a year.
This is a relatively minor point, but just wanted to point out that this is not really a ground-breaking concept. This sort of sale is commonly known as a “Dutch auction” or “clock auction” and has been around for centuries.
Again, point me to a website with a similar model.
This is really my final response to you because it is obvious you are a troll and possibly mentally ill.
1) Again, online gambling is a multi-billion dollar industry and growing. The projections are through the roof. It doesn’t matter if the U.S. participates or not. There is tons of money to be made by multiple companies. Your comments on this matter make no sense, are unfocused, and display a lack of knowledge of the space.
2) If you think any of eBay, Amazon, or Yahoo are “brick and mortar”, you are truly delusional. Each of these companies either defined or redefined the space they occupy with ballsy and innovative approaches. They may seem commonplace now, but when they first launched, they were anything but.
3) Convenient, no?. If you are going to challenge me by saying there are multiple sites with similar models, the least you could do is present one example. Instead you mouth off without presenting a single piece of evidence.
4) I don’t understand what you are talking about here. If it is in regard to Twitter, then please explain what “real business” they undertake. The company continues to bleed money with no viable business model in sight. For you to think that Twitter will be worth billions shows how far gone you are, and how fools can be swindled by new media hype. The company has $55 million in capital and $0 in revenues. It isn’t worth shit. Ev Williams is a Silicon Valley hustler, and while he may be able to flip a sale, the buyer will be left ass up.
5) The site isn’t even launched yet. However, yes, I bet you that a year from now they will still be operational. You can slit your wrists when you lose.
http://www.pricefalls.com has a descending price model, you don’t have to pay to watch the price drop, and there is free listing for sellers.
Nice artical. I believe Online SHOPING business will never ends. that tell us which one is better for us. Like i found Apple 8 GB iPhone 3G as low as 49$. http://www.just..._desc.aspx?ag=3
The real question is why the hell is it an iPhone app and not a web app?
Because iPhone users are statistically consumers with more money than brains.
Kidding.
My guess is there is already a saturated web market.
An idiot allegedly racing his Lotus Elise against a Porsche around Salt Lake City crashed into an oncoming car last night. Making this worse: his son was in the passenger seat, and he’s the one in critical condition.
http://www.auto...ther-kills-son/
Hey Guys,
nice to see SevenSnap on TechCrunch. Thank you!
If nobody buys the product, the product will start the next time with the “old” price. So we’re not collecting money. It’s our target to bring a fair entertainment shopping experience to the iPhone and also on other platforms in the next months.
Greets from Germany,
Tobias
What do you mean by “old” price?
Can you offer insight into the following scenario:
Let’s say I’m in an auction, hang around and you collect money from me in the form of “time credits”, another user ends the auction via a purchase action, that user ends up NOT buying the product. Since there was technically no purchase, are the “time credits” I paid to participate in that auction refunded? If not, you have essentially robbed me. This begs the question: As a user, how can I be assured that the auction I have participated in is legit and there is an actual transaction taking place – even in the case when I don’t end up purchasing the item? As the operator, you could create a program to end auctions at an optimal price point, resulting in the collection of user “time credits” without having to actually buy/sell product. Why should I trust your company? What type of oversight is there?
Also, do you have the products in stock before you begin auctions, or do you buy them after auctions have ended? If it is the latter, what will you do if I win a product and you can not obtain it? Do you offer any guarantees in terms of how long it will take to receive my product from the time of purchase?
Every product is 60 minutes in the Snap-Room. Let’s say you are in the Snap-Room and waiting for a good price. When the time ends and nobody bought the product, the product will start the next time, with the last, lower price from the previous Snap-Room. So our users still have the chance to participate and we’re not going to just collect money at this point. I think this is the only way to give our users a fair shopping experience.
You can also activate a push-notification, to get notified when a specific product comes up next.
Regarding your other question about what happens if a users purchases a product but doesn’t pay: The “time credits” will certainly be refunded to all the users of the Snap-Room. We will give a buyer up to 7 days to pay for the product. If the user hasn’t paid until then the time credits are refunded to all the other users in the Snap-Room.
Once the buyer paid for the article we will send it out immediately either from our own stock or through one of our fullfilment partners, depending on the user’s country of residence.
It can really do well, but i dont know if the amo0unt specified is worth.
@Jason Kincaid, do your homework before writing about this startup. The “CEO” has a really bad reputation. If you enter the CEO´s name (Tobias Hieb) in google search (german), it auto-completes with “Betrug” (=rip off / scam). That kind of makes me wonder and i think this will lead to the direction this app is all about. Just saying. I will not go into more details, just find out yourself about this guy and his history.
Tobias is good and serious guy. He also founded sevenmac.de, which is a free Apple magazine.
Hello Everyone,
I wanted to make everyone aware of a falling price auction site that already exists. It is called Pricefalls.com Pricefalls works just like this proposed app, however, it is totaly free for shoppers to veiw auctions and see prices fall. They do not have to pay to be in the room. Also, you can set a price that your’re willing to pay and if the product falls to your prove without anyone buying the product first, you win. Anyone can list on Pricefalls and Listing is FREE. I thought you guys may be interested in a descending prove auction site that already exists. I would like to gear what people have to say about Pricefalls.com.
News are always welcome
I did some research about Tobias Hieb some weeks ago, since I wanted to buy http://www.sevenmac.de – unfortunately it was way too expensive in the end.
In my opinion Tobias is a really decent guy, who got himself in some trouble at one point – which wasn’t his fault after all.
The way I see it, some kids he employed to write articles for Sevenmac went crazy after they smelled big bucks.
They really started to slag him after that, which led to this bad reputation.
Try something else for example – Type in Steve Jobs in Google (Germany) – Auto Complete suggest “Steve Jobs Cancer” and “Steve Jobs Sickness”.
So to Google Steve Jobs is a sick guy with cancer, not the inventor of the “friggin’ iPod. Have you heard of it?”
And T.H. probably isn’t a scammer – think about it. Let’s not judge a book by it’s auto complete.
I would rather run the room than paying to stay in the room. Clearly even if the company is completely honest it would earn a lot (by slowing down the dropping rate)
e.g.a buck per minute, 10 people in the room, and I only drop 9 dollars in a minute, I earn a buck by just running the room. Not counting the money earned by selling the item alone.
this thread is hilarious…:)
My blog covered sites like these in the past. They are just another way to take advantage of people.
Something tells me customer service would be a lost concept the owners of these sites.
@Eva
I searched for T. H. and would never trust this person. He made a lot of money with …! Be careful! He already has made a … name in Germany. WOT (Web of Trust Firefox Addon) warns by visiting his private webpage (http://www.tobiashieb.de). What would be the reason for doing this
???
For more information search on you own!
I think he is one of the most famous german www-scammers out there! And you guys going to blog about him, what the hell? For sure, this guy will sell sevensnap one day for a kick-ass price to any big idiot on ebay and after this you will never hear something about sevensnap again.
Also the concept is really nothing new …
@Hans-Peter Koch: Tobi, you´re an idiot!