Groupon Responds: Too much of a good thing? • Hacker News Board

Re: Groupon Responds: Too much of a good thing?

#21

Post by gojomo » Fri, Sep 17, 2010, 7:16 AM UTC

houseabsolute wrote: post #18

pigbucket wrote: post #10

From PosiesCafe blog: "When I talked to Lucinda today, she asked if there was a cap on how many were sold to help protect the business from too much loss, and the simple answer is, no. When you sign up for Groupon, you are agreeing to sell as many as get sold… and why would Groupon want it any other way? They get half of the earnings." From Groublogpon: "Also, to clarify one important point: it has always been Groupo…

Must be some kind of miscommunication . . . I doubt either are lying about their perception of the situation.

A wild guess: Groupon gives a better deal to businesses without a cap, or with high caps. Or, if you set your cap too low, you never get your 'day' because you're stuck waiting behind other businesses that offer more juice to Groupon.

That's fair, though it may tempt small businesses with only a rudimentary understanding of their own margins to over-market.

Re: Groupon Responds: Too much of a good thing?

#22

Post by megablast » Fri, Sep 17, 2010, 7:36 AM UTC

gojomo wrote: post #21

houseabsolute wrote: post #18

Earlier quoted context omitted.

Must be some kind of miscommunication . . . I doubt either are lying about their perception of the situation.

A wild guess: Groupon gives a better deal to businesses without a cap, or with high caps. Or, if you set your cap too low, you never get your 'day' because you're stuck waiting behind other businesses that offer more juice to Groupon. That's fair, though it may tempt small businesses with only a rudimentary understanding of their own margins to over-market.

Or groupon gives a better deal to there sales reps with there is no cap.

Re: Groupon Responds: Too much of a good thing?

#23

Post by olefoo » Fri, Sep 17, 2010, 7:37 AM UTC

enjo wrote: post #7

JeremyChase wrote: post #5

Earlier quoted context omitted.

I think it is horrible. It shifts blame entirely onto the shop, doesn't explain how it went wrong, isn't clear about what what GroupOn is doing to help this business, and doesn't give any clue how they will avoid this situation in the future. If I were a small business owner looking to use GroupOn I wouldn't feel comforted by this response in the least.

But it IS the shops fault. They entered into a bad deal that they apparently didn't have the fundamental business to handle. It was a terrible business move on the shop owners part, but I don't see a single thing that groupon did wrong in this case. It's not their job to audit your business and make sure you can handle it. They're in the business of brokering specials to large groups on behalf of the business. That's…

There is this old fashioned notion that sometimes you put the health and safety of others ahead of your need for immediate profits. That is, you don't sell someone something that they can't afford or that will cause them harm, especially if they there is a serious information asymmetry. If this seems quaint, antiquated and foolish to you; well that would be unfortunate. And it is unfortunate that our national character has changed to the point where we lionize people who became rich selling shady financial instruments, and pushing bad loans. _Caveat emptor_ is a good motto to practice, but taking advantage of those who are deaf to the caveats does not make you good, or right, and it is not a sustainable success.

Re: Groupon Responds: Too much of a good thing?

#24

Post by alsomike » Fri, Sep 17, 2010, 7:39 AM UTC

kylec wrote: post #6

brandnewlow wrote: post #3

Haha. It's impossible to hate on Groupon when Andrew Mason writes so well and so sincerely. Good luck haters. That's a good blog response.

I thought this bit was a bit condescending, and starts the response off on a sarcastic note: There have been a handful of stories lately documenting the struggles of cupcake shops running out of batter or sushi restaurants who don’t have enough rice to meet the demand brought on by their Groupon feature. I possibly missed a Groupon story or two, but I don't remember any where stores ran out of ingredients - the probl…

Yeah, this is a classic passive-aggressive reframing move, throwing up dust to obscure what the original problem was. The glowing, 'happy client' email sounds like it was written by a PR drone, and even then it doesn't even try to address the substance of the problem. It drove hits to the website?

The thing that gets me is when he says "If they have a great business, we’re the best amplifier out there." Every small business owner thinks they've got a great business! I'm sure their number one sales tactic is to exploit people's vanity, which may be perfectly legal, but it's a still pretty messed up thing to do.

And then he says "But we used to be all about helping people raise money for charity, we're good guys!" Yeah, but now you're pocketing other people's money, I guess things change.

Re: Groupon Responds: Too much of a good thing?

#25

Post by megablast » Fri, Sep 17, 2010, 7:40 AM UTC

enjo wrote: post #7

JeremyChase wrote: post #5

Earlier quoted context omitted.

I think it is horrible. It shifts blame entirely onto the shop, doesn't explain how it went wrong, isn't clear about what what GroupOn is doing to help this business, and doesn't give any clue how they will avoid this situation in the future. If I were a small business owner looking to use GroupOn I wouldn't feel comforted by this response in the least.

But it IS the shops fault. They entered into a bad deal that they apparently didn't have the fundamental business to handle. It was a terrible business move on the shop owners part, but I don't see a single thing that groupon did wrong in this case. It's not their job to audit your business and make sure you can handle it. They're in the business of brokering specials to large groups on behalf of the business. That's…

Sure, it is the shop owners fault, she admitted that.

Still, a partner that drives you out of business is not good to have. This is not good for groupon, they should have done things better, made sure that the owner could afford the deal for one. If margins are that thin, maybe they should be looking at not such a good deal, or no deal at all.

Re: Groupon Responds: Too much of a good thing?

#26

Post by forensic » Fri, Sep 17, 2010, 8:40 AM UTC

houseabsolute wrote: post #18

pigbucket wrote: post #10

From PosiesCafe blog: "When I talked to Lucinda today, she asked if there was a cap on how many were sold to help protect the business from too much loss, and the simple answer is, no. When you sign up for Groupon, you are agreeing to sell as many as get sold… and why would Groupon want it any other way? They get half of the earnings." From Groublogpon: "Also, to clarify one important point: it has always been Groupo…

Must be some kind of miscommunication . . . I doubt either are lying about their perception of the situation.

Based on all the published words of Lucinda it seems clear to me that she is essentially incompetent. Groupon is just one type of rope that she used to hang herself. But not the only rope by any means.

Having said that, of course it is in Groupon's best interest to avoid doing business in those kinds of situations. Pretty frightening PR for them.

Re: Groupon Responds: Too much of a good thing?

#27

Post by shadowsun7 » Fri, Sep 17, 2010, 8:59 AM UTC

forensic wrote: post #26

houseabsolute wrote: post #18

Earlier quoted context omitted.

Must be some kind of miscommunication . . . I doubt either are lying about their perception of the situation.

Based on all the published words of Lucinda it seems clear to me that she is essentially incompetent. Groupon is just one type of rope that she used to hang herself. But not the only rope by any means. Having said that, of course it is in Groupon's best interest to avoid doing business in those kinds of situations. Pretty frightening PR for them.

What proof do you have of Lucinda's incompetence? I must admit I'm curious as to how you came to that conclusion (even if it's little hints in the article, here and there).

Re: Groupon Responds: Too much of a good thing?

#28

Post by trustfundbaby » Fri, Sep 17, 2010, 9:31 AM UTC

megablast wrote: post #25

enjo wrote: post #7

Earlier quoted context omitted.

But it IS the shops fault. They entered into a bad deal that they apparently didn't have the fundamental business to handle. It was a terrible business move on the shop owners part, but I don't see a single thing that groupon did wrong in this case. It's not their job to audit your business and make sure you can handle it. They're in the business of brokering specials to large groups on behalf of the business. That's…

Sure, it is the shop owners fault, she admitted that. Still, a partner that drives you out of business is not good to have. This is not good for groupon, they should have done things better, made sure that the owner could afford the deal for one. If margins are that thin, maybe they should be looking at not such a good deal, or no deal at all.

> This is not good for groupon, they should have done things better, made sure that the owner could afford the deal for one

What do you suggest they should have done differently? Should they have filed her Taxes for her, balanced her books and determined her cashflow before turning her down. Maybe then she would only have written a blog post about how the Groupon people were a bunch of elitist asshats that wouldn't do business with her instead?

> If margins are that thin, maybe they should be looking at not such a good deal, or no deal at all.

I'm sorry but this is arrant nonsense. What is she .... five? She's a business owner for goodness sake ... if she couldn't do the math and see that it wouldn't be beneficial to her business to do a deal with Groupon then how is it Groupon's fault?

Re: Groupon Responds: Too much of a good thing?

#29

Post by trustfundbaby » Fri, Sep 17, 2010, 9:36 AM UTC

olefoo wrote: post #23

enjo wrote: post #7

Earlier quoted context omitted.

But it IS the shops fault. They entered into a bad deal that they apparently didn't have the fundamental business to handle. It was a terrible business move on the shop owners part, but I don't see a single thing that groupon did wrong in this case. It's not their job to audit your business and make sure you can handle it. They're in the business of brokering specials to large groups on behalf of the business. That's…

There is this old fashioned notion that sometimes you put the health and safety of others ahead of your need for immediate profits. That is, you don't sell someone something that they can't afford or that will cause them harm, especially if they there is a serious information asymmetry. If this seems quaint, antiquated and foolish to you; well that would be unfortunate. And it is unfortunate that our national charact…

> That is, you don't sell someone something that they can't afford or that will cause them harm

Seeing as she negotiated the terms down from Groupon taking 100% commission to 50%, I don't think the Groupon rep could have had an inkling that the woman was the type to be taken advantage of in the manner you're describing.

> And it is unfortunate that our national character has changed to the point where we lionize people who became rich selling shady financial instruments, and pushing bad loans.

Lets not stray into the melodramatic shall we? ... its a step too far to equate Groupon with people pushing bad loans. In 95% of cases or so, the businesses benefit greatly from doing business with Groupon ... they weren't uniformly getting screwed over like case of the punks selling Mortgage Backed Securities and Subprime Mortgage loans.

Re: Groupon Responds: Too much of a good thing?

#30

Post by prodigal_erik » Fri, Sep 17, 2010, 9:54 AM UTC

shadowsun7 wrote: post #27

forensic wrote: post #26

Earlier quoted context omitted.

Based on all the published words of Lucinda it seems clear to me that she is essentially incompetent. Groupon is just one type of rope that she used to hang herself. But not the only rope by any means. Having said that, of course it is in Groupon's best interest to avoid doing business in those kinds of situations. Pretty frightening PR for them.

What proof do you have of Lucinda's incompetence? I must admit I'm curious as to how you came to that conclusion (even if it's little hints in the article, here and there).

The owner of Posies is Jessie, not Lucinda (the regular customer). I have to admit I'm surprised Jessie agreed to take a loss without any upper bound. It's almost like stock speculators who used to take naked short positions with no hedging. Somehow it never crosses their mind to say "wait, couldn't this completely wipe me out?"