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Groupon’s Success Disaster

blog.redfin.com

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Re: Groupon’s Success Disaster

#121

Post by exit »

SoftwareMaven wrote: post #105
stanleydrew wrote: post #104

Earlier quoted context omitted.

Actually there is a fine line. Is it the mortgage broker's fault if a homeowner has to declare bankruptcy due to the broker promising her that dream house and selling her a completely unaffordable loan?

Actually, I don't see it as the broker's fault, and I think it is a net negative for our society that so many people (especially the people who sign and aren't able to pay) do think it is the broker's fault. If the broker is lying or otherwise being fraudulent, that's a different story. FWIW, I don't believe this is what the coffee shop owner believes.

why don't you think it's the broker's fault?

Re: Groupon’s Success Disaster

#122

Post by jojomagictime »

MicahWedemeyer wrote: post #117
jojomagictime wrote: post #97

I work for a Skydiving company that has, to GREAT success, ran two GroupOn promotions. We sell three different types of jumps, 10k 15k and 18k. The 10k goes for $169 and is out of a 5 seat Cessna, available only on some weekends. The 15k and 18k are available weekends and most weekdays and cost $199 and $259. Our 15k and 18k jumps are out of a large, 15 seat aircraft. We sold 10k jumps for $99. The COGS for this prod…

Good job on crunching the numbers and making it profitable. Groupon is definitely a win-win in some cases. Did the Groupon people help you with all this, or did you have to figure it out yourself? My main complaint is that Groupon doesn't seem to be looking out for the small biz owners and steering them toward successful deals. It sucks to feel like you can't rely on a partner to look out for your interests.

GroupOn helped us a lot. They didn't really do much due diligence to see if we could handle the promotion. They did however tell us what to expect, showed us similar deals that had gone on across the country, told us to buy more phones and hire more people to work them the day of our deal. They basically told us to get ready for war.

Let me tell you. You have not known fear until you are on the receiving end of a GroupOn. Those people are animals. It was like the Mongol Hordes were coming to rape and pillage our business.

GroupOn is amazing. Like Andrew said, they breathed life into our business. We'd still be here, but they changed everything.

We get the money up front, breakage is insane. The promotion we ran in March, about 30% of people have redeemed their Groupons. And we have already had the benefit of sitting on alllll of that cash this entire time. They aren't the best customers, but they are pretty damn good. They buy things, they bring friends, they purchase 12 GroupOns and use 3 of them. GroupOn is great. These businesses complaining about being pillaged, they really have no one to blame but themselves. I am by no means a savvy businessperson, but to me this was a no-brainer.

Re: Groupon’s Success Disaster

#123

Post by Kadrith »

igravious wrote: post #109
shadowfox wrote: post #101

Earlier quoted context omitted.

Well. Obviously you have a right to your opinion.

Obviously I don't because I keep getting downvoted for it.

I'd wager you are getting downvoted more for how you are saying things, rather than what you are saying.

Re: Groupon’s Success Disaster

#124

Post by Kadrith »

igravious wrote: post #110
kgermino wrote: post #99

Earlier quoted context omitted.

Just because he's a CEO and you don't find the articles interesting doesn't mean that he shouldn't be posting them. As it's been said HN is full of entrepreneurs who contribute massively to the site. If you have a problem with that maybe their not the one's who should leave...

Wow. That's really nice kgermino: a not so veiled hint that I should leave this site because I have a dissenting opinion. And like I keep saying, it's not that I don't find the posts interesting or not. It appears that I was operating under the assumption that the submissions in HN are user-generated. Now that HN has gotten popular and can drive a lot of traffic towards a site I think that people should disclose the…

Why can't the CEO of a site also be a user of HN? Should they have to get someone else to post their article? How would we track that and is it really worth the effort?

Your posts that got downvoted were the short ones without context or value to the conversation. All of your posts that actually provide something to the conversation still have positive points (at the time of posting).

Re: Groupon’s Success Disaster

#125

Post by codexon »

Revisor wrote: post #107
codexon wrote: post #89

Anyone wonder why Redfin is getting so much coverage on HN recently? They don't seem to be a YC company. I just took a look at their Wikipedia entry and noticed that they received investment from Vulcan, founded by Paul Allen. No wonder they called Bill Gates a hero in their previous blog post. http://news.ycombinator.com/item?id=1694538

Because they write interesting articles.

I really didn't think this article had any new insight.

It simply boiled down to: let's capitalize on this Groupon buzz and say we won't make the same mistakes.

Their article on Bill Gates was simple link bait.

Re: Groupon’s Success Disaster

#126

Post by pyre »

marcusbooster wrote: post #90
pyre wrote: post #51

Earlier quoted context omitted.

> But this is exactly what a small business is buying from Groupon. But this is not what Groupon is billing themselves as providing though...

What's that saying? - If it's free, then you're the one being sold. They make their money by selling to small business. From the website: Groupon for Businesses With an unparalleled ability to drive hundreds - even thousands - of customers through your door ...

  > Dishonest consumers are the problem here, though
  > this is a problem that Groupon could do more to curtail.
This is what I was talking about. Groupon is not billing their subscriber list as a group of cheap-o's that will only use the discount and never return to the business and try to use the discount multiple times -- which they obtained by registering for Groupon multiple times under different names/aliases -- while they are there for their single visit.

If Groupon were to describe their subscriber list as such, then I could see their business start to decline, no?

It would be interesting to see what the average conversion-rate from one-time to repeat customer is based on Groupon coupons.

Re: Groupon’s Success Disaster

#127

Post by SoftwareMaven »

exit wrote: post #121
SoftwareMaven wrote: post #105

Earlier quoted context omitted.

Actually, I don't see it as the broker's fault, and I think it is a net negative for our society that so many people (especially the people who sign and aren't able to pay) do think it is the broker's fault. If the broker is lying or otherwise being fraudulent, that's a different story. FWIW, I don't believe this is what the coffee shop owner believes.

why don't you think it's the broker's fault?

If the broker lies or presents false information, then it is obviously his fault, and that includes hiding things like a a seven-year balloon payment.

On the other hand, if the broker tries to push you into a loan that is more than you can afford or has bad terms for you (like that seven-year balloon payment), it is your responsibility to know whether you can make that work or not.

I really believe that a good portion of the reason we are seeing so many foreclosures is because people weren't willing to take responsibility for their actions. They left it to mortgage companies to tell them what the could do instead of looking at their own lives to figure out what they should do.

Re: Groupon’s Success Disaster

#128

Post by SoftwareMaven »

Someone wrote: post #106
SoftwareMaven wrote: post #105

Earlier quoted context omitted.

Actually, I don't see it as the broker's fault, and I think it is a net negative for our society that so many people (especially the people who sign and aren't able to pay) do think it is the broker's fault. If the broker is lying or otherwise being fraudulent, that's a different story. FWIW, I don't believe this is what the coffee shop owner believes.

In the Netherlands, law (dis)agrees with you. Disagrees: Banks are obliged to make a honest effort of preventing that from happening. Agrees: another way to look at that is that, alongside the mortgage, banks do give financial advice. Part of that is answering the question "can I afford this?". If they ignore that, you could call that "lying or otherwise being fraudulent".

As I said elsewhere, if the bank lies to you, they are certainly culpable. In the US, there are standardized forms that must be filled out that are supposed to give you all the "true costs" of a loan.

Beyond, that, though (and recognizing laws might differ), the bank is obligated to tell you what you "qualify" for, which may be drastically different than what you can afford.

The real grey area is in the tricks they can play with loans, and this is the point where "buyer beware" can certainly turn into "hang the SoB", depending on the behavior of the bank.

Re: Groupon’s Success Disaster

#129

Post by exit »

SoftwareMaven wrote: post #127
exit wrote: post #121

Earlier quoted context omitted.

why don't you think it's the broker's fault?

If the broker lies or presents false information, then it is obviously his fault, and that includes hiding things like a a seven-year balloon payment. On the other hand, if the broker tries to push you into a loan that is more than you can afford or has bad terms for you (like that seven-year balloon payment), it is your responsibility to know whether you can make that work or not. I really believe that a good portio…

responsibility is a matter of competence. the broker is the most financially competent party.

Re: Groupon’s Success Disaster

#130

Post by bbqtom1400 »

jcnnghm wrote: post #19
vaksel wrote: post #2

at this point groupon has more or less a monopoly so they can easily rape the businesses.. but this article seems to blame groupon instead of the business owner. 1. why would you price your promotion at a loss? 2. losing "$8,000" may sound like a lot...but in reality it should be looked at as $8,000 worth of advertising. And getting your message out to 200,000 or so local customers for that little isn't that bad.

1. That's groupons business model. The average profit margin in the service industry is less than 10%. If you give people a 50% discount, you are definitely going to be losing money. The idea is that you let them try your place, then they keep coming back. In practice, most of the places I've talked to haven't seen it this way. 2. It's really expensive for what it is, and could easily tank a small businesses cash flo…

Thank for your opinion and you are on the right track. It actually is a bit worse than people whom aren't in the restaurant business probably realize. The average restaurant in the U.S. makes between 2.4 and 3.6 on every dollar without alcohol sales. Restaurants that serve any alcohol along with their food sales actually do a bit worse on the average, 3.4% on the higher end. The average is the key and folks who think it is much higher don't do the books. On the average most cannot afford many hits on their controllable costs besides giving 50% away on their food sales (coupons for alcohol are usually illegal). For every dollar spent on advertising or live music I need $4 or $5 back to break even with what was given away, coupons as an example, or spent. I have even put a coupon, as a lesson to a coupon salesman, with no reduction in price, on purpose. I received many,30 the first day, but no one I saw or spoke with ever came back to pay full price. At least the coupon salesman stopped bugging me. Groupons are OK if you are a new business. In my experience they fill your business with folks who rarely return. Thank you.
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