[ryanmarsh]

Griddy didn't have to beat the bricks like most REP's in Texas. Smart consumers aware of the risk beat a path to their door. Unfortunately, as with anything like this, the followers and fools soon showed up (reminiscent of $GME) and a good thing somehow suddenly became "a scam".

[GCA10]

I'm not sure we can really say "smart consumers aware of the risk." Isn't it more like "Opportunistic customers who hoped the risks were immaterial beat a path . . . "

Out of morbid curiosity, during a long drive this weekend, I listened to 20 minutes of an AM radio guy's pitch for some retirement annuity system that sounded quite sweet at first. As he kept talking, though, I realized that he was being very evasive about what happens if you die early. Connecting the dots - he keeps all your assets. No survivor benefits at all.

I used to do financial investigative reporting. I was looking for the catch. And it nearly glided past me. Ditto for disclosing the full details about the maximum caps on your electricity charges.

These promoters are masters at smooth, low-candor discussions of risk. They're what make the pendulum keep swinging back and forth between deregulation and re-regulation.

[rowland66]

I think that it is called an immediate annuity. It is a standard insurance product that offers protection against outliving your assets. You pay a lump sum in return for a guaranteed income as long as you live. Yes, if you die early, the insurance company wins, if you live longer than expected, the insurance company looses.

I think these are more common in Europe where people will often take a lump sum pension payout at retirement, and buy an immediate annuity.

[curryst]

Isnt a pension already designed to be a payout until you die? What's the advantage?

[ryanmarsh]

I consulted for a large existing REP to help analyze the market and suggest strategies for launching their own Griddy competitor brand. So when I say "smart consumers aware of the risk" that is exactly who the research showed the customer was. The initial customers were people perfectly capable of the arbitrage. They even had customers using IFTTT to turn up the thermostat (summer months) when prices would spike (in 15 min increments).

I literally built a prototype competitor product to Griddy and I'm downvoted for explaining exactly how this shit works.

[talentedcoin]

I didn't downvote you, but comparing this situation to what happened with GME (as in your previous comment) is, at best, a stretch. At least with GME one could argue that people signing up for margin accounts to buy stock options should know what they're doing ... which is maybe a different subject ... but as others have indicated in this thread, a lot of providers like these employ some fairly aggressive/shady strategies to get consumers to sign on, and don't candidly discuss worst-case scenarios like these.

[alasdair_]

IFTTT doesn’t seem like the best solution to something that costs you an enormous amount of money if it fails. especially in a situation with potential power outages killing the box you were using at an inopportune moment.

[bumby]

Can you elaborate on how the research was conducted and specifically how the risk was measured by consumers?

There’s an awful lot of research that implies humans are very poor estimators of low probability / high severity events

[ryanmarsh]

Research was normal UX/cust research... interviews, polls, etc.

Customers were intelligent and motivated by a desire to do their own hedging rather than have an REP in the middle with an opaque profits. There’s a lot of profit in there and customers wanted to keep it. Customer ultimately knows his own demand and tolerances better than any REP. When I say “he” I mean men. Overwhelmingly male market. Lots of small business owners, day traders, cognizant their investment performance. This was very early. Few had even heard of Griddy at this point. I think it’s a fantastic addition to the market. What’s missing is the ability to hold futures. That would really level the playing field for sophisticated customers.

[rfdave]

Sounds like a fun filled hobby. How many people are interested in actually spending 30 to 40 hours spooling up to understand what they're getting, and 5 to 10 hours a month tracking it? I'm sure there's a population, but I'd rather spend another $20/month and do something fun with my time.

[bumby]

Thanks for responding. I’ll just say it’s important to distinguish between a desire to make a profit and the ability to accurately gauge risk. Behavioral economics has a lot to say about this

[bitcurious]

Given that neither the power companies nor the regulatory bodies correctly anticipated this risk I think it’s a huge stretch to say that consumers did.

[guyzero]

" a good thing somehow suddenly became "a scam"."

Does Griddy push real-time cost information to consumers to enable them to react to situations like this? "Scam" might be harsh, but their model clearly failed.

[baldeagle]

I'm not a customer - but I've seen screenshots of their app for doing just that, along with alerting.

[greedo]

Nice victim blaming.

[emteycz]

Stop using this term for people who were not victims of anyone other than themselves, it hurts actual victims.

[talentedcoin]

The reason why we have things like regulations and consumer protection laws is exactly to prevent people from, as you put it, becoming victims of themselves.

If everyone had this kind of attitude, we'd still be driving cars with no seatbelts.

[emteycz]

Yeah, except that car manufacturers started to put seatbelts into cars before regulation. Similarly with all other protection systems. Regulation made it ubiquitous and that's great, but don't mislead like this.

It's very easy to become a "victim" of yourself even in a regulated world and I assure you the number of people who do will not go down, only the means of doing so will change. Perhaps we should focus on education instead of regulation.

[greedo]

There's a reason that we term things like power and water "public" utilities, and that decent, well run governments regulate them. One, it's to ensure safe, reliable supplies. And two, to make sure that they're fairly priced. What happened in Texas shows the complete and utter failure in this regard. Sure the citizens of Texas voted for this complete clusterfsck, but not everyone, and those who end up with the short end of the stick shouldn't be blamed because the majority were a bunch of idiots fed lies for decades.

[renewiltord]

> Unfortunately, as with anything like this, the followers and fools soon showed up (reminiscent of $GME) and a good thing somehow suddenly became "a scam".

Haha, isn't this just the thing? It's the same thing as with Kickstarter, Bountysource, numerous Google betas, etc. The risks are just sitting there visible as all heck, and fools will jump in blind and then scream when the scary event happens.

It has been the best argument for paternalism I've ever seen: not to keep people safe from themselves, but to keep fools away from the rest of us so that we can make intelligent risky decisions.

In fact, I've shifted my view of the accredited investor thing. I am so glad a bunch of blind followers can't just do something dumb and then ruin everything for the rest of us.