Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

techcrunch.com

Post reply on HN
Print view View original

51–60 of 256 posts

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#51

Post by dragonwriter »

whistlerbrk wrote: post #43
kardos wrote: post #2

Looks like businesses have collectively realised that groupon is a miserable deal and it's finally caught up with them, after having been running on fumes [1] for a couple years now. [1] http://blog.bodellconsulting.com/2013/03/01/groupon-a-bad-de...

Business owners really ought to know what their margins are. I feel bad for the ones who got pressured into bad deals, but they have to know what their literal bottom line is.

The value proposition with Groupon is largely that you are selling a limited deal at promotional prices (i.e., ones which you would not be profitable sustaining) to build business. It was essentially, when it was novel, a new acquisition channel.

Even business owners that new their margins wouldn't know its value to their business without testing it in their actual circumstances.

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#52

Post by sigmar »

bane wrote: post #16

I'll be honest, I know Groupon and its ilk are terrible business, but as a user of the service I've had lots of fun exploring activities and restaurants that I literally would never have bothered with or known about. In the last few weeks I've taken a Scuba lesson, a Horse Riding lesson, an intro to art class, found a couple new amazing sandwich shops. I took an amazing trip to Ireland for something like 50% off the…

I agree with you. Seems like they should have stayed small and been happy with small returns. Any business can throw a 50%-off deal up on their facebook page or website. They weren't adding value by consolidating those deals to one site.

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#53

Post by nmrm2 »

omouse wrote: post #35
josefresco wrote: post #19

Earlier quoted context omitted.

Lots of things might be great for consumers, but for businesses it just doesn't make sense. Besides what I've read, I've heard from business owners/clients who try "group" discount services, but walk away feeling that it did little to help their customer growth long term. Would you be willing to pay more for those same experiences?

I've heard from business owners/clients who try "group" discount services, but walk away feeling that it did little to help their customer growth long term Sales and discounts aren't a good way to increase customer growth unless they're done consistently. There's a reason that I get a free salad when I get a pizza; no one really wants that salad. There's a reason they have $5 beers every Monday at a bar; no one wants…

> If the business owners/clients are stupid enough to give away the best experiences for cheap, it's their own damn fault for not having any business sense whatsoever.

And yet Groupon is closing down operations in 7 countries and laying off 1000 people.

Groupon's customers are these small businesses, for Groupon to succeed it needs to be in a symbiotic relationship with these businesses. "It's your fault for being an idiot" isn't the correct way for anyone to think about Groupon's relationship with its customers; that sort of thinking will only backfire even harder.

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#54

Post by somedudethere »

bane wrote: post #16

I'll be honest, I know Groupon and its ilk are terrible business, but as a user of the service I've had lots of fun exploring activities and restaurants that I literally would never have bothered with or known about. In the last few weeks I've taken a Scuba lesson, a Horse Riding lesson, an intro to art class, found a couple new amazing sandwich shops. I took an amazing trip to Ireland for something like 50% off the…

My experience with groupon involves two different times. Both times involved me calling the business and being immediately asked if I had a Groupon. I don't think this was a groupon only number, but the business pretty much runs entirely off Groupon. One was to have my carpets cleaned when they arrived they said the Groupon was for using water only (it wasn't steam cleaning just regular) and I had to pay extra to actually get the carpets clean. All said and done it was the same price as going with someone else from the beginning.

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#55

Post by nmrm2 »

Someone1234 wrote: post #44
kardos wrote: post #21

Earlier quoted context omitted.

> Restaurants can use the service whenever they expect to have empty tables, allowing to still profit for them, but with a reduced profit margin. Businesses receive 20-25% of retail price when they take a groupon deal, so you'd need a profit margin >75% to even entertain that idea. Also it cannibalises some of your existing customers, converting your 75%+ profit margin customers into near zero or loss customers. I'd…

Playing devil's advocate here... You do have to consider the advertising in the calculation. If they spend $2K/year on advertising now, and a GroupOn sale might be viewed by 10K/people and purchased by 100-150, then still might come out ahead even with $0 or -$10/head ($1500 in loss for the GroupOn). If a place is doing a GroupOn it is unlikely a zero revenue person will displace a paying person, since the place woul…

> then still might come out ahead even with $0 or -$10/head

After blowing an entire year's worth of advertising on a single promotion...

Which is an awful idea because a) advertising needs to be sustained; and b) Groupon users are a small subset of the local population that might be interested in your product.

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#56

Post by pavornyoh »

noelsusman wrote: post #32
sync wrote: post #12

Earlier quoted context omitted.

Is this it? Looks ridiculous. http://uptake.com

That's a crowded space to get into these days. You're competing directly with the big boys at Microsoft, Google, IBM, etc. as well as countless other startups. This seems especially difficult to do when you don't even have a product to sell. Also that website is horrendous.

I agree. That uptake website needs a lot of work. What the heck is that?

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#57

Post by fredkbloggs »

swang wrote: post #38

> "We believe that in order for our geographic footprint to be an even bigger advantage, we need to focus our energy and dollars on fewer countries." Did this company spokesperson just pass first year business writing? It's like the writing prompt was, "Your company is downsizing, what is the most absurd way you can describe it?" I couldn't help but laugh at the sentence.

Glad someone else noticed this. I kinda glossed over it at first, then read it again and broke it down thusly:

1. Our footprint is a big advantage today (presumably this means more reach).

2. We want to make that advantage bigger.

3. Therefore we are reducing our footprint.

At first it sounds like an outright contradiction. But it does make sense, in a very convoluted sort of way. The advantage of having broad reach will be increased by exiting those markets that are losers for them, because the (still presumably fairly broad) range of markets they're staying in will be more profitable overall. But it would have been much simpler to just say "We're exiting a handful of smaller markets where we aren't leading or growing, focusing our efforts where they're doing the most good." But I guess you can't say that these days.

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#59

Post by bpicolo »

mooreds wrote: post #9
kardos wrote: post #2

Looks like businesses have collectively realised that groupon is a miserable deal and it's finally caught up with them, after having been running on fumes [1] for a couple years now. [1] http://blog.bodellconsulting.com/2013/03/01/groupon-a-bad-de...

My brother in law runs a restaurant back east, and he said that Groupon has been a great channel for driving business. Anecdata, I know. I think there's a business opportunity to help people running groupons capture the most value out of the leads (at the least, sign them up for an email newsletter).

I think it depends on the business. Someone up top mentioned it was a great way for them to try scuba, sky diving, etc. That's not the sort of thing you necessarily see a lot of repeat traffic for. Not sure.

Re: Groupon Is Laying Off 1,100, Shutters Operations in 7 Countries

#60

Post by fredkbloggs »

joezydeco wrote: post #30
nck4222 wrote: post #26

Earlier quoted context omitted.

Well, they basically did. "Altogether, $946.8 million, or roughly 86% of the funds raised across the three investments, was paid out to Groupon directors, officers and stockholders. Just $151.4 million was retained by the company to use as working capital and for general corporate purposes." June 2011 - http://mashable.com/2011/06/02/groupon-cash-out/#AoBOlTTNEqk...

That was an amazingly effective scam, and nobody putting into those F and G rounds said boo. Just mind-blowing.

It's mind-blowing that anyone would subscribe to an F or G round in the first place. That they would do so despite the obvious scammy nature of the whole thing is probably criminal, at least if they were managing OPM.
Post reply on HN