Skip navigation

Contracts, crack, confusion and marshmallows

The last few days have been really interesting around here. We’ve had about 200 people a day signing up for our dump your contract sweepstakes. We’ve also really hit a chord, with tons of people embellishing on how trapped and wronged they feel in their current mobile relationships.

My first reaction to all this is, “These poor people! They have been wrongly imprisoned by their mobile providers and I need to set them free!”

My second reaction is sort of like, “Hey, what are they complaining about? They signed a contract. A fair agreement between consenting adult parties. They did not want to pay a lot upfront for their device so the phone companies offered them a reasonable exchange. Pay less now and a bit more over time. Stay with the service until you have repaid your debt. How can you really complain about that halfway through the deal?” (I’ll admit I have a very personal aversion to anything resembling a victim’s mentality. I almost worry that it makes me a little Republican sometimes.)

In considering all this, my mind has wandered to a bunch of random references and analogies.

One is a great little undergraduate public policy class I took at Duke about 20 years ago. It was about the regulation of substance abuse and vice. I think the professor was Philip Cook if anyone is fact checking. It had a lot of philosophy mixed in and, among other things, we spent time questioning what right we have as a society to keep people from doing harm to themselves by smoking crack or jumping off buildings. One answer made a lot of sense to me. If most people end up saying later that they wish they had never started doing something in the first place (as most smokers do, for example), then it means that the decision making process is flawed (by confusion, youth, addiction or whatever) and we have a right to intervene before it ever gets to that point.

I’ve also thought about the famous marshmallow test. This is where they offered 4 year old kids a marshmallow now or two marshmallows later. They ended up discovering that the kids that had the emotional maturity to wait for the two marshmallows went on to better careers, lasting marriages and happier, healthier lives.

I’ve thought about this awesome SNL sketch:

I’ve also thought about this cartoon that @kenschafer showed me the other day:

At Ting, we have a pretty dangerous business strategy. We are exposing a ton of information. We are encouraging people to think rationally about a lot of decisions where irrationality has reigned supreme for years. We are asking you to forego the comfort of an unlimited plan, for example, to ultimately pay less for what you use. And we are boldly suggesting that people pay for their device now rather than ultimately pay way more for it over time (in the form of inflated monthly service bills).

I think so far we are appealing to the early adopters that jumped on the two marshmallows 40 years ago.

But I’m going to assume that millions more of you are pretty smart too. So what do all these references above indicate? Why is Ting “going to war against service contracts” as Joanna Stern explained it? The answer is that mobile service decisions have been way too clouded by confusion, fear and addiction. People have not quite had the information they need to compare these options and plans fairly. They also haven’t really considered that when someone has you under contract for two years, there’s a good chance they’re not going to service you like they could lose you tomorrow.

I guess my conclusion is that American mobile phone users are confused, cracked out 4 year olds with a debt problem. But we love them. And we want to help.