Minding minutiae may make more money
Always read the fine print. OK, that can be a bit much to ask. Maybe it’s better to urge caution, to be vigilant in approaching deals, whether they are simple contracts for services or investments that may — or may not — yield riches.
Greg Craig, chief executive of Griddy, the California company that came to Texas recently to take advantage of an opportunity it saw in the state’s deregulated energy market, said far too many consumers are taken advantage of because they are content to let their contracts with electricity providers ride.
“Loyal customers are so sticky that one of the big companies calls them ‘inerts,’ ” he tells our L.M. Sixel “They’re not going anywhere. Utilities count on that. In the old world of retail electric providers, those are the greatest customers you can get. The ones who come on and never leave and you can adjust the price up and they still don’t leave.”
Griddy’s plan was to disrupt the retail electricity market here by offering residential customers access to the wholesale spot electricity market rather than the plans offered by retail providers.
What some of its customers didn’t realize was that fluctuating wholesale prices meant that there might be big spikes to go along with rock-bottom prices. Over the course of a year, Craig says, his customers are better off, but an August price surge nevertheless cost him some business.
“August left some of our members feeling exposed and that they didn’t understand or have the capability to reduce their consumption,” he says. So the company suspended its $9.99 monthly membership fee. “It was a lot of revenue not collected by Griddy in that month, but we felt it was important to make no money and to send a signal (to customers) that we’re with you.”
Human nature being what it is, it’s reassuring when someone says they have your back. But again you have to read the fine print.
That’s the advice from Chris Tomlinson, who this week reminds us that there are plenty of folks out there who are happy to take advantage of our trusting natures and separate us from our hard-earned money.
“Grifters are more common than most people think,” he writes. “They attend church services, join service clubs and play golf at the most exclusive courses. They put ads on AM radio. They look and sound authoritative, and they know where people with money gather. They are sharks who infiltrate goldfish bowls.”
Every once in a while, an investor hits a home run. Truth is, that’s generally the result of solid due diligence and hard work, not a well-placed bet. Successful investing is a long game, one that’s more small ball than swinging for the fences.
But big hits are fun to watch. “The scam is easy to spot,” Tomlinson observes. “But these guys are excellent salesmen, and enough people give them money to make it worthwhile. Make sure anyone you love knows to get a second opinion and run a background check or at least a Google search before handing over their savings.”
The folks at NextSeed, whose crowdfunding site opened doors for small investors and small businesses, have teamed with Collaboration Capital, which till now had served clients with its traditional wealth management investment approach. Both provide the kind of vetting that investors — experienced and not — need in order to separate potential from potential fraud.
“The future of finance in so many ways … (is) technologybased applications,” Christopher Knapp, Collaboration Capital’s chief executive, tells our Andrea Leinfelder. “So if you can create a company that combines the technological aptitude with the rigor that goes with how I was trained in terms of fundamental securities analysis and understanding of macroeconomic patterns and shifts, you actually have a really powerful company.”
Welcome to Texas Inc.