On the subject of madbid.com, one thing I’ve wondered is: What’s the best strategy to follow when bidding?

Madbid.com used to recommend waiting until near the end of the countdown timer before placing your bid.  I’ve searched their site now for a link to show you, but I can’t find it any more – maybe they’ve changed their recommendations.

It’s just as well, because I always thought that was a terrible plan.  OK, it makes perfect sense from madbid.com’s point of view – they want to make sure that every punter gets as much of their time as possible before losing.  But that very fact meant (to me) that it was exactly the wrong strategy to follow.

For instance, if a punter has placed a bid in a 30-second auction, they’re fixated for as long as their bid is active, wondering if this is the bid that’ll win.  The longer they’re staring at the screen, the more fixated they are, and the more involved they are.  If they lose just at the end, I think it’s more likely that they’ll leap in again with another bid, and that’s exactly what someone bidding against them doesn’t want.

So, if I were bidding against them, I’d make a point of bidding again as quickly as I could.  As soon as someone topped my bid, I’d bid again.  They’d get a few seconds while I noticed and clicked things, but that’s all.  I’d concentrate on denying whatever ‘rush’ they get from watching their active bid, trying to crush any enthusiasm they have for the auction.  Taking all the fun out of it for them would seem to me to be an excellent strategy to follow.

After all, it’s no fun spending your pound for a bid only to see it disappear a moment later, before you’d really had a chance to savour it.

So, if I were bidding on madbid.com auction, that’s probably how I’d do it.  But I’m not likely to ever join, so you won’t have to worry about bidding against me.

A month and a half ago, I twitted that I thought madbid.com was the best business idea I’d seen that month.

I still think it’s a brilliant idea, but given the calls for penny auction sites like it to be regulated I should probably explain.

Auction sites like madbid.com are different from regular auctions.  First of all, you have to pay for each bid.  Secondly, all your bid does is increment the bid by a penny and reset a countdown timer – if the countdown reaches the end and your bid was the last one, you win!

What you win is the opportunity to buy the auction item at the bid price.

This can lead to some fantastic bargains, such as the guy that got a car for £7.

Brilliant, right?  Well, that’s not the brilliant part.

It’s quite addictive to watch, and I can see how people would get caught up in it.  I can even see how it could feel quite like gambling, and if some body or other determines it to be gambling, it’ll be regulated as such.  I don’t really have a problem with that regulation, but nor do I have a problem with people gambling if they want to.

But the brilliant part, the real masterstroke, is what happens when you do some simple calculations.

Here’s a current example from the current live auctions: an 8GB ipod nano.  The current bid stands at £4.37, and every time someone bids the countdown timer gets reset to 30 seconds.

Now, you can buy bids for anything from £1.50 to £0.75.  It’s only if you buy bids in bulk (more than 100 bids) that the price falls below £1.  So let’s call £1 the average, just for the sake of simplicity.

That means that right now you could bid – costing you £1 – and reset the countdown on the ipod nano auction by 30 seconds, and – maybe, just maybe – win the opportunity to buy the ipod nano for £4.38.

It also – and this is the brilliance – means that so far madbid.com has made £437 on an item you can buy for £109.  That’s £328 pure profit – and the auction hasn’t even finished yet!

So madbid.com makes a huge profit, and the winner gets a bargain.

Brilliant!

The only real problem is that the money has to come from somewhere, and it comes from all the bidders who didn’t win.

They’re paying £1 (on average) for each bid, just to reset the counter and have a brief moment where they think they have a chance of getting a bargain only to have that chance snatched away.

I can see how the ‘rush’ that people get from bidding like that might be like gambling.  Doesn’t mean it shouldn’t be allowed though.  Maybe that ‘rush’ is worth £1 to them, just like the ‘rush’ people get from buying a lottery ticket.  So maybe it should be regulated like the lottery.  I don’t know (I’ve never bought a lottery ticket, and never bid in a madbid.com auction).

I just think such an addictive way to separate people from money is pure genius.

Interesting. Very interesting. Very clever too. Instead of coming up with a new protocol for signaling anti-spam indicators between server and client, it’s done via IMAP. Another benefit of this IMAP approach is how all Gmail e-mail that’s tagged as spam gets replicated to the junk or spam folder on the client side. This way, if you’re one of those people that likes to double check a junk mail folder to make sure that no legitimate mail squirreled its way in there, now you can without having to visit the server itself (through the Web interface).

Years ago, not long after I got my first mobile phone, I was on the Tube in London.  Since it was a boring journey, and since my phone was a New Shiny Thing, I started thinking about why it didn't work on the Underground.

I'm not totally fick.  I know that, on one level, it's just plain because the signal from the cell tower can't reach the phone through all that mud, concrete and detritus.

So fair enough, the phone can't contact the outside world.  Why can't I phone someone in the next carriage?  I mean, both phones have transmitters and receivers that are more than up to the job.  Technically it's possible.  Why doesn't it work?

Then the cynic in me realised.  If phones worked peer-to-peer like that, how would the phone companies bill for the minutes used?  That's really the crux of the matter - without a centralised intermediary, there'd be nothing to charge for.  If there was nothing to charge for, they wouldn't build the phones that could do it.  And if they didn't, who else would?

I was a little annoyed and depressed when I realised all this on the tube.  Here we were in this advanced civilisation, we have the technology to do useful things like this, and the reason we haven't got it is because someone can't see how to make money off it.  The practical aspects of it all could be better than the current cell phone networks in many circumstances, and it could easily co-exist with it, but no-one did anything about it.

I didn't do anything about it either.

Hurricane Katrina and the after-effects in Louisiana have been making the headlines, and there's been a lot of talk about how badly communications technology fared during the crisis and aftermath.  Cell phones didn't work, cell towers didn't work, WiFi didn't work, land lines didn't work, all because the city was flooded.

This prompted a message from Bob Frankston to a mailing list I'm on.  I've never met him, but he's got a great handle on technology and isn't afraid of original thinking.  I don't always agree with him, but I liked this:

Expensive dedicated radios are just as bad as 9/11 demonstrated.

As I keep pointing out we need are simple packet radios that automatically configure into a mesh and connect via whatever transport including satellite links. If they are packaged properly and can use various sources of power ranging from batteries to solar to "whatever" then they can be deployed from the air.

Using asymmetric radio approaches the power can be in larger base units a distance a way and using unbounded spread spectrum and redundancy some portions of the signal should be detectable despite obstacles.

The downside is that this may work too well compared with traditional cellular even under the best circumstances. Without the burden of billing it would be just like the rest of the Internet -- too good for people to accept the concept. And we can't risk that can we?

He's right!  If phones worked that way, performance would get better in crowds instead of worse.  More peers would mean better connectivity and more routing options.  Being in a crowd now just increases your chances of getting a busy signal (or allegedly getting your call disconnected "accidentally" so the cell tower can route a pricier pay-as-you-go call).

Phones like this would be dramatically better in disaster areas like New Orleans.  Better communications couldn't have brought in water or food, but they could really have saved lives in coordinating rescue efforts.

We don't have them now because companies can't see how to make money from the service aspect, but I don't see that being a problem in the long term.  WiFi is popular enough at the minute that volunteer efforts are taking place to WiFi-enable sites, regions, communities, all at no cost to the user.  Mesh networks are increasingly used - even my little WiFi router is mesh-capable now because the company had to release the firmware to the community (thank you GPL) and some independent developers added the mesh features for free.

Mesh networking will hit that inflection point, and sooner or later we'll have tiny devices that connect to the mesh and become part of it, and handle all our communications using whatever means are at the mesh's disposal.

But I can't wait.  I want it now.