5/1 Shark Tank: Zero Pollution Motors

Caution: Spoiler Alert

 The Big Idea: A car that runs on air. I thought the Airpod sounded incredible (until I saw what it looked like that is). Just load a compressed air canister and your off. It was described as working based on a propulsion principle where the air moves the car forward like a untied balloon that moves forward when you let the air out. 

The Pitch: $5 million for a 50% stake in Zero Pollution Motors, LLC. which has exclusive rights to build and sell the Airpod in Hawaii.                                 

        Other Product Facts:

• Estimated Selling Price of $10,000.
• Top speed of about 50 mph.
• Range of 80 miles on one air canister.
• Estimated cost to refill canister is $2 and should take about 5 minutes using a commercial-grade air compressor.
• Invented by Guy Nègre of Motor Development International.

Commentary: The sharks were impressed but were reluctant to invest because Pat Boone and Ethan Tucker only secured rights for one state, Hawaii. They pointed out that if the idea was successful in Hawaii, other entrepreneurs would be able to secure rights from Motor Development International and market the product in other states. This certainly makes sense, the presenters estimated the cost of securing rights for all states would be $200 million.   The car is also being introduced in India by Tata Motors with a roll-out rumored to be sometime in 2015.  I agree with the sharks that securing rights for all states is essential. 

I don't think this is a vehicle I or anyone I know would buy though. Its not big enough and simply does not look safe for urban streets or highways. At 50 mph, its not even fast enough for highway driving. I think it would be best suited as a golf cart, an expensive one though. The cost of introducing this product in the US will be enormous due to all the regulations governing cars. 

Robert Herjavec agreed to pay $5 million for a 50% stake contingent upon securing rights in all states. I don't think Herjavec will ever close on this deal. I think he agreed to the deal for PR purposes. Time will tell and I do hope they prove me wrong.

Please comment below.

ResellerRatings.com, Can You Trust It?

ResellerRatings.com launched in 1996 and continues to solicit consumer reviews of online merchants as it did from the start. So why am I writing about them now? Recent developments cast doubt on the reliability of the company's ratings and its business ethics in general. Today we take a look at why ResellerRatings is bad for merchants and consumers alike.

The Company changed hands in August 2012 and is now owned by Answers.com. Under the new owner, the Company continues to generate revenue from Merchant Membership, an optional service that merchants can sign up for to help them "manage" their online reputation. With Merchant Membership, the merchant is given the ability to respond to customer complaints and can also solicit feedback from consumers via the merchant's check out page or via email. Merchants who do not sign up and pay for this service cannot do either. By designing their business with this revenue model, their reviews are biased from the start because consumers rarely go out of their way to write good reviews thought they might do so if prompted. Does Home Depot deserve an 8.48/10.00 rating compared to its direct competitor Lowe's with a 1.17/10.00 rating? Those of us who shop at these home improvement stores know that they are quite similar in both product offerings and customer service. What accounts for this disparity in ratings is simply Home Depot's willingness to pay ResellerRatings for its services. Lowe's garnered 103 unsolicited ratings mainly from customers who had a bad experience and chose to write about it on the site while Home Depot was able to solicit feedback and has close to 1300 mostly positive reviews. Still not convinced? Read on..

Customers of the popular New York photography store B&H Photo were surprised to see the Company's rating slide to a current 5.99/10.0 rating whereas B&H previously had a rating in the high nines. Customers were right, something was amiss. In 2007, Google founder Sergey Brin remarked on an earnings call in 2007 that B&H was his favorite camera store to shop at. If your ever in New York, schedule a visit, its like no Best Buy you ever walked into, I promise. B&H prides itself on superb customer service and an experience like no other. B&H spokesman Henry Posner provided the answer on why the Company's ratings dropped so much. ResellerRatings hiked its prices and B&H refused to pay, discontinuing its participation as a Merchant Member. Mr. Posner pointed to an article on InternetRetailer.com which explains that merchants who discontinue participation as a merchant member cause all solicited customer ratings to be removed. This has the effect of dropping ratings significantly since solicited ratings cause a rise in high ratings to begin with as discussed earlier. ResellerRatings claims to have discontinued the practice, caveat emptor.

ResellerRatings does not disclose its merchant pricing structure but claims to charge merchants based on their size. Merchants have reported that ResellerRatings has been asking for exponential increases. This amounts to blackmail because the merchants know what will happen to their ratings when they stop paying.

ResellerRatings is very savvy at managing their online reputation making sure that criticism is squashed and muted. Take a look at the Company's Wikipedia page for a prime example. Any edits critiquing the Company quickly get overridden as evidenced by the history page. Full disclosure: I have unsuccessfully edited the page. Also take a look at the following YouTube video which further explains the Company's actions. Notice how many negative ratings the video garnered. It is believed that the Company is generating negative ratings to reduce the relevance of the video. Class action lawsuit, anyone?

Update 5/21/2017: B&H has once again become a Merchant Member and guess what? They now have a fabulous rating of 9.7/10.