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FOBO (YC S11) Launches in SF to Become The Fastest Way to Sell Your Electronics (techcrunch.com)
84 points by ed 1377 days ago | hide | past | web | 60 comments | favorite

I predict they will have to deal with a lot of fraud especially while they are guaranteeing prices sight-unseen.

What happens if the the item isn't what I say it is? Can the buyer get their money back? What if the item is perfect but the buyer claims there's something wrong with it and issues a chargeback?

The reason I don't sell electronics on eBay is because there are a crazy number of scam artists who know how to exploit the safeguards. In my last eBay sale (for all time), a guy bought my old cell phone, claimed it was broken, and then mailed me back a different broken phone of the same model. That is a difficult threat to guard against. Based on their site, I'm not convinced they've spent nearly enough time thinking about this... they are not just connecting buyers and sellers; they are going to be on the hook for any chargebacks.

From their TOS[1]:

> Payment: As a buyer, your credit card is charged immediately when an auction ends for the full offer amount.

> Item acceptance: Once both parties agree that the sale is complete, the seller may request payment from FOBO, prompting confirmation from the buyer that the item has been received and accepted, as-is. Buyers must inspect the condition of the item and ONLY accept the item if it is as described in the item listing. Once an item has been accepted, the item may not be returned to the seller and is not eligible for refund.

> If an item has already been accepted, only with the seller's express consent will a refund be granted.

[1] https://sites.google.com/a/getyardsale.com/fobo-terms/

That's a good goal, but real life payments aren't quite that simple. Witness:

> FOBO reserves the right to recoup funds associated with Buyer chargebacks in accordance with Section 5 of this Agreement.


They should really be using ACH or debit transactions, to reduce the risk of chargebacks.

You can reverse an ACH. A wire, a wire is readonly. But an ACH can be reversed.

That said, if they did that it would certainly suppress the number of buyers. As is, I would only buy on a site like that because I know I'm ultimately protected on all returns by American Express. Hell, it's nothing personal, i feel the same way about shopping at a Department store or Amazon.com or whatever. My Amex lets me return anything (up to a $$ amount) for 90 days regardless of whatever anti-consumer BS return policy the store might dream up.

Or Bitcoin, to remove them completely! I'm kidding, mostly, but "no chargebacks, ever!" is often touted as an advantage.

Seriously though, they should offer Bitcoin as a payment method if the seller has indicated they will accept payment in that format.

Or someone could start up a Bitcoin-specific FOBO-like service. It's not exactly rocket surgery.

I'd be very likely to use it.

a guy bought my old cell phone, claimed it was broken, and then mailed me back a different broken phone of the same model. That is a difficult threat to guard against.

Maybe for electronics there should be a way to record the serial number and require the buyer and seller to confirm that the serial number matches the one on record for the transaction at the time of delivery. That would at least reduce the chance that someone would try to return a different item.

The scammer swapped the serial number sticker behind the battery! If the phone wasn't inoperable, I could prove it.

(How do I know? The sticker was off-center and poorly attached + the phone was missing some memorable scuff marks. Also, my phone worked.)

I'd probably include a photo of the serial number in the sale images

I had a photo of the serial number -- the scammer swapped the sticker!

I use usps when I ship amazon orders, and would have contacted the postal inspectors about felony mail fraud.

Fraud apart, while the price guarantee helps solve the network effect, I'm wondering if it is absolutely necessary for the business model to work.

The guaranteed price would have to be extremely low, like when you take your big box of old DVDs down to those retail stores that buy them back used for $0.50-$1.00 each.

I'm not sure if this service is hitting what I see as one of the major pain points of selling your used electronics on cragislist or eBay: You have to list each item separately if you want to get any kind of reasonable price. Who else has one of those "big piles of old computer junk" stuffed in their closet? I do. There are probably a few items in there I could still get $40 or $50 for individually, but if I just photo the whole pile and sell it, I won't get more than $50 for everything.

That's an interesting question, but I think the problem of bootstrapping enough users pales in comparison to dealing with fraud. As an aside, I read that Amazon itself buys items from their used marketplace if it believes they are underpriced.

Bitcoin with escrow to the rescue!


Incidentally this happens to be built on Parse and Stripe; two amazing companies which cut out a HUGE chunk of work for us. Happy to talk about either, in particular we've done a lot of work on Parse and have built a bunch of neat extensions to the platform.

Parse got bought by Facebook and I don't trust them with my data let alone my customers data.

Is Parse a "write once, export for all platforms" type thing? If so, how come you only have an iPhone app and not Android?

It's not. Parse just replaces your backend, you'll still need to write dedicated clients for Android, iOS, etc.

I used FOBO to sell a bunch of stuff I'd had lying around for ages. It worked great. Highly recommended.

I've been on the service for a few months and find it really helpful. I've sold a ton of unused gadgets through fobo that I was always too lazy to post on craigslist.

Their about page is certainly interesting:


So their about page tells us they are douchebags that like to mess with epileptics.

We've slowed this down a bit, thanks for catching this. Each frame now lasts .33 seconds, which appears to be the safety threshold for photosensitive epilepsy: https://en.wikipedia.org/wiki/Photosensitive_epilepsy#Web_de...

Thanks again!

Is calling them douchebags for failing to think of something warranted?


The discrimination against epileptics in the valley is disgusting.

I was on their beta for awhile, and it was really cool until they started the later versions that were mainly focused on selling electronics - seemed like there was never anything available - anytime I opened it it was just a list of sold items. Hopefully this public launch changes that, but I will say their emails to me were always interesting enough that I never unsubscribed!

The about page is hilarious: http://www.fobo.net/about/

Not sure, however, it will help build trust in the brand :)

They seem to be hosted on Github too.

I am all up for a fast way to buy/sell electronics off ebay and craigslist. So in that sense, this is a good alternative to try. Some of the issues that I see upfront:

- Ebay prices. Is it just me or ebay average price is really not a good indicator ? Yes ebay has cheap auctions but at the same time, there are a lot of "buy it now stuff" that is sometimes overpriced. How does it compensate for that ?

- "No shipping". That is a little misleading because even though there is no shipping, a physical meeting is necessary at the seller's preferred time/place according to them. So how does that make it any better than no shipping in terms of convenience ? Unless I am missing the point.

- One personal thing. It is 2014 and yes apps are the thing but there is no web version at all ? What if I want to browse through the listings and sitting on my computer? I guess i understand the point that the mobile part makes it fast/easy but personally, I would prefer a web version as well (unless it is in works)

Presumably the idea is the buyer places the money in escrow with FOBO, and when the buyer and seller meet the buyer uses the app to confirm the item is as described, and the seller to see the payment has been released from escrow, then the seller receives the money a day or so later.

This would deal with certain problem cases like 'buyer tries to haggle', 'item not as described', 'buyer paid online but seller doesn't show up', 'buyer robs seller of item', 'seller robs buyer of money' and so on.

If you need a smartphone to be able to use the service, it would be logical to make the app first. I agree a website for browsing would be nice.

I suppose with FOBO we can add: 'buyer robs seller of smartphone' and 'seller robs buyer of smartphone' to the list ;)

Glad I read the whole article, because at first I thought it was not very interesting given that craigslist works ok. But the in app payment handling is an awesome feature.

Its interesting how this problem of payments is basically non-existent in Hungary. People are used to using escrow and getting paid after delivery. Not to say that this app wouldn't work in Hungary but the cultural differences would certainly slow its virality. I love the bitcoin points made before me, and I too believe that accepting them would be a great move given the media hype and its functional overlap. In addition, I don't feel its crucial to solve payments for an app like this. Rather partnering with other solutions makes more sense in my head. I'd love to hear what inspired the FOBO team to develop a solution of their own. Also shouldn't there be a more generic solution to the second hand market? Fobo team, I would love a comment on why electronics (I'm sure you guys did testing but did you compare focused to non focused or you just compared across focus categories)? Also, why wait so long and release such a full app versus doing something simpler as a start? Altogether great job and congrats!

For your last question Joseph Walla wrote a great story on our development process:


As for electronics, the simple answer is most consumer devices have a well-established price on other markets, making it easy to guarantee prices without significant risk.

The best marketplace for local deals is surprisingly... Facebook. Safer than Craigslist, you deal with people you know (if only through friends or their profile) and you don't need to risk your money as a buyer or your items as a seller.

Fobo's initial price is also iffy if you're selling a customized item...

Is there a particular Facebook app you use, or is it more a status update kind of thing: "Hey, any takers for my old iPhone 4" ? I guess that would work for a one off thing. But selling stuff to my friends I feel that I have to give them an exceptional deal. And I wouldn't want to pollute everyone's feed with a bunch of items.

Nope, just local groups, there's plenty of them everywhere. Not as convenient as a dedicated app/website, but it's good enough for occasional deals...

You could try a local private group, there's probably one for sales/swaps/freebies if you search.

I like the idea and might sell stuff, but am reluctant to buy used electronics except from known entities, particularly for items like cellphones.

Carrier and Apple blocks for stolen items can make your purchase worthless. I wish Apple could implement a "safe transfer" process for items, using your Apple ID, to verify the seller is legitimate and transfer title irrevocably to the buyer.

I met one of the Apple security guys at 30c3 and this kind of thing seems to fit with how they view customers , too.

Third party sale sites should be allowed to participate, especially as innovation like fobo wouldn't come freon a big company, but the transfer of "title" really needs to be solved by phone manufacturers and/or carriers.

I really like this idea. I do think creating a marketplace is a hard thing to do, especially in this space. Cragislist is the 'default' in this space, and doesn't really deserve to be. Hopefully someone can change that soon.

Why doesn't it?

One obvious trick is that people could list items in poor condition to get the "fair condition" price from FOBO when it doesn't sell.

If this company is acting as an escrow service, don't they have to register themselves as an escrow agent in order to do that?

It hurts sometimes to read the news, because I thought of this around 2008 or 2009 (the idea of a commodity price on items, so for example any used football might be worth about $1 and the site would know that it could buy for say 80 cents and sell for $1.20 and have practically unlimited buyers and sellers, so it would work like "sell it now" from seller to the site middleman who would resell at a later date).

I have an idea list of anywhere from a few dozen to a few hundred projects, depending on what your cutoff is for viability. To preserve my sanity, I've had to divide it in half between things I would like to invent and work on, and things that I just want to exist in the world so I can use them. Once FOBO scales I suppose it will be in the second and I will just use it.

Now that the cat's out of the bag, here was my original checklist to make a tool like this:

1. Find a domain (anything related to yardsale is all taken). EASY

2. Write a mobile app that lets the user take hundreds of pictures and use image recognition or crowd sourcing to recognize the picture, find it in the database and show the bid/ask price for the item. EASY

3. Tally the total with a button to print QR stickers for all the items with names and prices. EASY

4. Have a button so the user can order the shipping boxes from the site with packing materials and shipping labels. HARD (shipping/labor)

5. Box arrives, user packs everything up, stuff gets scanned at the city's warehouse and user gets the total deposited in their paypal or bitcoin. HARD (shipping/labor/financials)

6. When buyers purchase an item, it comes in the box from the warehouse, possibly allowing a small fee for courier service, otherwise by the next day. HARD (shipping/labor)

7. In the event of fraud, seller would receive a hold against their account for the price of the item they lied about, and couldn't sell again until they paid it. Same thing if buyer disputes a good item and it turns out they were lying. In any event, if you are selling 100 items for $1 and a few don't work out, it wouldn't tend to matter all that much and most people would write off the losses as a cost of doing business and cancel their sale or order a replacement. HARD (labor)

Could I have gotten into ycombinator with a plan like this? The hard part is handling shipping, warehouse/dispute labor and financials. I could have written all of the software myself or with a small team, the only thing holding me back (as always) was capital. I think fraud could be handled by trends in a user's sales/purchases. I would get rid of the notion of positive/negative ratings the way Craigslist did, since it's a commodities market. My original plan was to start local and just write the app and have the business be employee-owned and just hire more people as it began scaling. Looking at it now, I can see that's the real execution of the business and that the app's just the idea. It may have been an if-you-build-it-they-will-come idea that could have gone viral though, which makes me sad because now it's in someone else's hands.

Anymore, when I think of something, I generally have between about 2 weeks and 2 years before it gets invented. I've been struggling with this because it's a bit like the sci fi concept of faster starships coming along, so no matter which ship you send to a star, it will be passed by a better ship, so there's no point in sending one in the first place. I've even come to the conclusion that rewarding invention eventually will make no sense, because things will be being invented so quickly that only rewarding the first to market will hang the vast majority of inventors out to dry. All that will matter is capital and the ability to gain access to it, as we're seeing with incubators and kickstarter.

How many other people reading this feel the duality of their everyday life and what their life could be? Spending their days struggling to make enough money to survive and knowing that every day pushes the prospect of bringing their ideas to fruition further and further from possibility? Doing what other people want instead of the things in their nature that could potentially change the world? To me, this is the problem of our time, at least for makers. One of my favorite quotes is "failure is not the only punishment for laziness; there is also the success of others" by Jules Renard. I suppose I shouldn't post this but what the hell, it doesn't matter anymore for this idea. One down, one hundred to go..

just because they exist doesn't mean it will be a huge success. I used to get envy when I saw an idea implemented I thought of, until I got a bit older and started seeing the same companies failing.

I personally think this idea will be over-run by broken/stolen products.

I used to think press/hype was equal to success... now I know better. We know we have great lengths still to go; this is just the start. And by that, I mean this is our second product (our first is Yardsale, which was funded by YC in the S11 batch), after years of working insatiably to solve a problem we all have. Anyway, thanks for the perspective guys.

On broken stuff, one of the benefits of a local marketplace like FOBO is that you get to see the items before the seller is paid. On eBay, the quality varies widely, and sellers seem to take advantage of that often. Hopefully FOBO is a big step forward.

"By now you probably know that Craigslist sucks as a way to sell stuff...But somehow, no one has figured out a way to make it better or provide a real alternative."

Sorry, what am I missing that is stopping Ebay being an alternative for selling stuff? Fobo sounds great and everything, but no alternative to Craiglist for selling stuff?

Only in SanFran and only on Apple. Couldn't even test it if I wanted to :(

everything has to start somewhere, so why not SF, makes sense to me. And iPhone is a sort of screening process i suspect. Android being the cheap option offers less screening. Besides in SF the iPhone is the dominant mobile platform. It all makes sense.

However, I'm sticking with CL because I mostly buy/sell long tail items (vintage cameras) and CL works just fine for me.

Hmm, no web? Not ideal, though it makes some sense to start on IOS. But limiting it to mainstream items and relying on eBay for price metrics doesn't seem like a sustainable business model to me.

I was going to give this a shot, but 20% off a hot commodity such as Macbook Air was too much for me, so abandoned it.

Hey Ryan, Ryan from FOBO here. Totally agree with the hot commodity that is a MB Air (they are followed by 700 users already in SF). This said, you may be surprised by the results. We had a MacBook Pro Retina sell for 170% of what we guaranteed for it the other day, just while in beta.

is this the same team behind yardsale?

Yup - a whois on the domain indicates Ryan Mickle of Yardsale Inc is part of this.

So does it mean that yardsale has been abandoned?


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