“What’s just depressing to me is how—and it’s not just for us, let me generalize it—the moment a company goes public the conversation shifts from how they’re trying to change the world and the product they’re building to how they’re making money. All the coverage around Facebook’s new search tool was, a little bit about the feature and then it gets immediately into how the market is reacting to it. Like, who the fuck cares?”
Elizabeth Spiers: “One month ago, I interviewed then-Groupon CEO Andrew Mason for a forthcoming Fast Company feature on the future of Groupon. His performance—at turns, defensive, weary, combative, and naïve—foreshadowed his firing on Thursday.”
Photo Issue 2011: Andrew Mason is the unlikely CEO of last year’s unlikeliest breakout business, Groupon. The 30-year-old Midwestern music grad has transformed the bottom-feeding coupon trade into a billion-dollar force that even sexy Google lusted after.
FC: Big data is also why you have faith in Groupon
RH: Yes. There’s two points on which a lot of the discussion about Groupon misses key insights. First is what exists with Groupon today: both scale and data. Data becomes important because of the scale. If you look at the core service that Groupon built on, it’s: Here are some offers that may motivate you to act today. That’s interesting enough for you to plunk down the money.
As the activity in this space gets denser, it becomes important for [deals companies] to maintain their value proposition, both for the merchant and the consumer, and to be able to match the right two. The ability to do that kind of matching, off the data, is the kind of thing that has a robust, at-scale, defensible value proposition and makes it harder for other people to offer products that are as good.
I also think people discount Groupon’s ability to build new value propositions. Groupon launched Groupon Now. An ability to raise my mobile phone and say there’s a 20 percent off offer two blocks from you in the next hour is actually pretty useful. And that’s a value of scale.
Awww snap digi-beef!! Thought nothing could break Groupon’s stride? Thought wrong. A report from SXSW:
Sunday’s Groupon panel on the Fast Company and PepsiCo stage took an unexpected turn when Travis Kalanick, a longtime Silicon Valley entrepreneur who runs online car service Uber, spoke frankly about his negative experiences as a client of Groupon—and several Groupon staffers in the audience took issue with the story he told.
The panel was framed as a post-game discussion of Groupon’s own panel on its creative, quality-based approaches to marketing and copywriting, which are helping the company keep market share in the face of an army of clones. But it quickly got real.
“In marketing, in the stories you tell, you guys are nothing but winning,” Kalanick said. “But there is such a disconnect with operations.” He said that Groupon representatives had promised him primary placement and not delivered, didn’t run the offer on the dates he wanted, handed him a data dump in a clunky Excel spreadsheet, and gave him an initial estimate of proceeds from the offer that was ten times higher than what the group deal actually delivered. “That’s money I spent to put cars on the road that we didn’t need.”
Darren Schwartz, Groupon’s SVP of sales, grabbed a mike in the middle of the panel to respond that Groupon’s hiring a team of merchant managers to improve the oversight process from sales to the completion of an offer.
“The reality is that Travis has identified the same stuff we have,” Schwartz told Fast Company afterward. “We need to merge our marketing excellence with our operations excellence and get it all to the same level.” They’re rolling out new tools to help local businesses better track their ROI from each offer.
It’s too early to tell whether Groupon is simply the harbinger of a huge trend in social consumption, or itself the winner of the race. Its ultimate success or failure is sure to rest on the quality of its relationships with tens of thousands of local merchants as well as customers. In this way all business, like politics, is local. That’s why I was a little taken aback to hear Schwartz describe Groupon’s approach.
“We want to help them not only understand how to use Groupon,” Schwartz said, “but how to run their business better.” Whoa, I said. Does the local pizza guy who’s been around for 20 years really need you to tell them how to run their business?
Groupon CEO Andrew Mason took to the web again Thursday to announce that the group-discount company will be pulling its controversial Super Bowl ads from the airwaves. In theblog post, Mason took personal responsibility for the ads and wrote that they will be replaced by “something less polarizing.”
The ads were the creation of Crispin Porter + Bogusky, the Boulder, Colorado-based ad agency that was the subject of a recent Fast Company profile. Five days after critics accused the agency’s ads of trivializing the political struggle in Tibet, Mason has decided the Super Bowl spots went too far.
“One thing is clear—our ads offended a lot of people,” he wrote. (A firestorm of commentsfrom Fast Company readers about the commercial certainly confirms this fact.) “We hate that we offended people, and we’re sorry that we did it.”
Though Mason did not name Crispin Porter + Bogusky by name in the apology (he mentioned them in an earlier post), he did publicly criticize their work. “If an ad requires an explanation, that means it didn’t work,” Mason said. “Clearly the execution was off and the joke didn’t come through.”