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What is your
time worth? Buried in a story of a
service-economy entrepreneurial success are questions and notes about the
economic and social value of one’s time. kwc Never Mind the Clip-On
Ties, Geek Squad Can Fix Your PC
By Damon Darlin, New York Times, Saturday, May 20, 2006 Robert Stephens, the founder of the Geek Squad, has made a
very good living solving the problems of technophobes and people who thought
they were technically adept. So it
may have seemed a bit odd to interview him at the recent Maker Faire in San
Mateo, Calif., a weekend festival of technology tinkerers who play polo on
Segways or build steam-engine robots and pool heaters out of barbecue grills.
These people, after all, are ardent do-it-yourselfers, people who derive real
joy from never ever having to hire help. "The
do-it-yourself crowd is a dying breed," Mr. Stephens said as blasts from a nearby
flamethrower mounted on an old fire truck periodically punctuated the
conversation. He wasn't being nasty, because his technicians were at the ready
to support the fair exhibitors just in case. He made that statement because it
explains why the company he founded as a college student in 1994 has grown and
grown. When he sold the Geek Squad to Best Buy in 2002, his
computer repair company had 60 employees, or agents. Today, it has 12,000 men
and women dressed in black pants, white shirts, a black clip-on tie and white
socks who arrive at customers' homes in black and white Volkswagen Beetles. The conversation with Mr. Stephens, who is chief inspector
of the Geek Squad for Best Buy, helps to explain the success and, indeed, the
proliferation of services that do what most Americans are unwilling to do themselves.
It is not confined to oil changes, maid service or hiring a gardener or
handyman. Almost every time you buy electronics you are offered a service
contract either by the manufacturer or the retailer. Beyond service contracts, though, consumers need some
insight into how to be smarter about deciding when to call for help. It all
boils down to the classic choice between time and money. Sure, one can point to another giant of retailing, Home
Depot, and argue that there is better evidence that the do-it-yourself trend is
strong. Mr. Stephens has economics on his side. Economists say people who call
in a technician, even one who will charge, as the Geek Squad does, $159 to
install a wireless network or $229 to wipe out a computer virus, can be acting
rationally. These tasks may not be worth your time. Indeed, Home Depot has hedged its bets and is increasingly
marketing its installation services for contractors to hang your kitchen
cabinets or roof your garage. Economists say industrialized societies are spending less
on the basics of life — food, clothing and shelter — and more on leisure
pursuits. Indeed, Robert Fogel, the Nobel-winning economics professor from the
University of Chicago, has gone so far as to predict that by 2040 it will take
the average American household only 300 hours of work a year to supply its
basic needs. As leisure time becomes more valued, Americans are loath to
give it up. We spend money to get more of it. How much we are willing to spend
depends on what we make as well as a more intuitive process of how we measure
what our leisure time is worth. The results from 2 online calculators that determine what
your time is worth may surprise you. Try http://hughchou.org/calc/realwage.php or http://moneycentral.msn.com/investor/calcs/n_time/main.asp. First, your hourly rate may be lower
than you think. For instance, someone making $70,000 a year, but who puts in 50
hours a week and commutes an hour each way, may discover the hourly rate is not
$33, but about half that. So does that mean you hire a handyman only when he costs
less than $16 an hour?
It's more complicated than that. With only about 12 hours of true leisure time
a day, each precious hour is bought with more than 5 hours of work. According
to the calculator, each hour of spare time would then be worth about $85. How an economist measures the value of leisure time is
inexact because do-it-yourselfers sometimes have a stronger motivation than
saving money. They
enjoy the process. Because seeking joy is less understood than seeking money,
economists are still struggling to decide whether growing tomatoes or making
drapes is rational. Putting a little joy into repair work is what motivated Mr.
Stephens. "Computers were the best thing that happened to my
generation," said Mr. Stephens, 37. As a student at the University of
Minnesota in the early 1990's, Mr. Stephens said he didn't have a lot of money.
"So I started fixing things. I saw people buying computers, so that's why
I went into tech support." He had yearned to do something glamorous until he had an
insight: "The world is dominated by plumbers and drywall contractors — the
boring businesses," he said. "What if a creative person went into a
boring business?" By age 24, he had created the Geek Squad. "The best thing that happened to me was that I had no
money," he said. It forced him to be creative. The uniform, which pokes fun
at the image of the socially awkward tech-proficient person, was a way to
establish a brand and concept that would be harder for others to copy. "I
wanted it to look low-tech, like the guy at the service station, Ernie, who you
knew all your life." The flat fee for services, rather than an hourly rate, was
an effort to avoid the expense of paperwork and monitoring the staff for
fraud. Mr. Stephens sees the world
of service moving toward flat fees. "We are a flat-rate society
because people are willing to pay for simplification," he said. It is easier for consumers to understand and they are less
likely to feel cheated, he said. "People hate the hourly rate. They hated
it when it applied to cellphones and Internet service." Not all on-call technicians work that way. Rescuecom, a
franchise of computer technicians with 100 offices nationwide, charges hourly
rates between $88 for an appointment and $250 for an emergency call.
"Support is in an abysmal state," said David A. Milman, the chief executive
and founder. "You have manufacturers slicing and dicing the price of
computers. There is no way they can afford to provide free support." Both Dell and Hewlett-Packard, the top
PC sellers, provide enhanced customer support for a fee. Dell, for instance,
will walk you through setting up a home network for $99. Mr. Milman said he thought consumers ought to make the
decision to seek professional help not on the value of their time, but on the value of the data that is on their
computer. The Geek Squad divides the world into 3 distinct sets of
consumers. One is, of course, the do-it-yourselfers. Another is the "do it
for me" crowd, those who have made the calculation that they have better
use of their time. And the third set, which Mr. Stephens calls the "I thought
I could do myselfers," holds some unrecognized potential. This is the group that starts out calling customer service
when faced with a technical stumbling block, only to find themselves sitting on
the phone, immobile, for several hours as the problem is lobbed from one call
center employee to another. After that, he said, they are more willing to
consider an alternative. "They've sat on the phone one time too
many," Mr. Stephens said. Many of the hardware makers offer service contracts, because
they are quite lucrative. But they are lucrative only if they can avoid sending
someone to your home to fix the problem. They are designed so you end up paying
extra — with your time. That's not to say that a flat-fee service isn't also
designed to help you part with your money. Mr. Stephens the Geek Squad, as part
of Best Buy, turning into consultants who advise Best Buy customers on products
before buying. He said that's going to become more important as Americans try
to figure out how to expand home networks to link the television, PC, stereo
and storage devices. "You'll see Best Buy pushing installation
services," he said. "For me, service is nothing but a profit
center." And what if, by some miracle, technology becomes easier to
use? No worries, he said. "The easier computers got, the more they needed
us when they crash." That's because people did more things with their
computers and sought help to do even more. "Sure you can do it yourself,
but it is a lot like changing your oil," he said. "Why would you?"
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