Why Groupon Is Poised For Collapse • Hacker News Board

Re: Why Groupon Is Poised For Collapse

#131

Post by pja » Wed, Jun 15, 2011, 12:48 PM UTC

edanm wrote: post #124

pja wrote: post #120

Earlier quoted context omitted.

Right, because obviously a small business owner is going to be happy to tell some random journalist who phones them up, "Yeah, we did that third GroupOn deal because otherwise we weren't going to be able to pay the rent". They'll make up some waffle that regurgitates GroupOn talking points in order to justify their actions to an outsider without giving away the fact that the company is on the verge of bankruptcy & if…

Do you realize that by that same logic, you're basically saying journalism can't exist, period ? It's always a case of some "random journalist" phoning people up and asking them tough questions. Journalism does exist, of course, so obviously there are ways around this problem. They're pretty easy to see even in this case - journalistic confidentiality, i.e. the journalist won't reveal the source, therefore no one wil…

Sorry, I don't see the contradiction at all. Of course journalism is about asking "tough questions" but there's nothing that compels the interviewee to answer those questions, and even if they do answer truthfully their "truth" may differ from yours.

As the original article makes clear, how you classify the way a small business interacts with GroupOn is very much a matter of perception: through one lens it looks like a small business loan with a weird structure. A small business owner might see it differently & GroupOn itself has a vested interest in not having their customers view GroupOn deals in that way of course.

Re: Why Groupon Is Poised For Collapse

#132

Post by edanm » Wed, Jun 15, 2011, 3:36 PM UTC

pja wrote: post #131

edanm wrote: post #124

Earlier quoted context omitted.

Do you realize that by that same logic, you're basically saying journalism can't exist, period ? It's always a case of some "random journalist" phoning people up and asking them tough questions. Journalism does exist, of course, so obviously there are ways around this problem. They're pretty easy to see even in this case - journalistic confidentiality, i.e. the journalist won't reveal the source, therefore no one wil…

Sorry, I don't see the contradiction at all. Of course journalism is about asking "tough questions" but there's nothing that compels the interviewee to answer those questions, and even if they do answer truthfully their "truth" may differ from yours. As the original article makes clear, how you classify the way a small business interacts with GroupOn is very much a matter of perception: through one lens it looks like…

"Sorry, I don't see the contradiction at all. Of course journalism is about asking "tough questions" but there's nothing that compels the interviewee to answer those questions, and even if they do answer truthfully their "truth" may differ from yours."

Sorry, I guess I wasn't being very clear earlier.

What I meant was, by the same argument as to why the author couldn't talk to store owners, by that very same logic, journalists can never talk to primary sources. Because I can take any journalistic piece, and say "the source that the jouranlist talked to is just making up answers because XYZ".

And like I tried to explain, the way out of this mess is a few things - the journalist can interrogate and try to get past the bias of the source, and they can also promise to keep conversations off the record.

But saying "well I can't talk to primary sources, I'll just talk to other people" is a cop-out. Especially when the other people also have a clear bias in this story.

Re: Why Groupon Is Poised For Collapse

#133

Post by pja » Wed, Jun 15, 2011, 8:52 PM UTC

edanm wrote: post #132

pja wrote: post #131

Earlier quoted context omitted.

Sorry, I don't see the contradiction at all. Of course journalism is about asking "tough questions" but there's nothing that compels the interviewee to answer those questions, and even if they do answer truthfully their "truth" may differ from yours. As the original article makes clear, how you classify the way a small business interacts with GroupOn is very much a matter of perception: through one lens it looks like…

"Sorry, I don't see the contradiction at all. Of course journalism is about asking "tough questions" but there's nothing that compels the interviewee to answer those questions, and even if they do answer truthfully their "truth" may differ from yours." Sorry, I guess I wasn't being very clear earlier. What I meant was, by the same argument as to why the author couldn't talk to store owners, by that very same logic, j…

Hmm. I think my counter-point would be that in this particular case the interviewee has a direct incentive not to tell the truth and a plausible alternative story provided for them by GroupOn's PR machine. Plus they know that whatever they tell the journalist can't easily be checked: it's not as if the journalist is going to get access to the books, at least not until after any bankruptcy at which point the whole thing will be moot.

I would surmise that these properties don't usually apply to most journalistic interviews. In this particular case it becomes difficult to know whether you're getting a true picture from interviewing GroupOn client businesses because the alternative explanation put forward by the author of the original piece gives the SBO a strong incentive to lie about their motivations. (Whether to an interviewer or to themselves is an open question!)

Another thought occurs to me: As you say, a good journalist can often find a way round these problems but in this particular case, where we're talking about a whole business model, it seems to me that a few counter-anecdotes will not have much impact: Believers in the GroupOn story will (rightly) be able to say, "well of course there are a few people mis-using GroupOn in this way, but they're a tiny minority & the vast majority of GroupOn customers are very happy with their experience dot dot dot" (I'm sure you can fill in the rest of the PR guff yourself).

Re: Why Groupon Is Poised For Collapse

#134

Post by wisty » Thu, Jun 16, 2011, 2:37 AM UTC

nkurz wrote: post #110

wisty wrote: post #105

Earlier quoted context omitted.

Not really. Often, food is 30%, staff is 30%, rent is 30% and 10% goes to the owners (who are paying for a 300k fitout). Coffee markups can be even crazier. Obviously, it depends on the restaurant. A good value steak-house might sell a steak, chips, and veggies where the food costs 70% of the meal; but they have large volumes and hope to sell lots of drinks. Anyway ... the staff and building sit idle for a lot of the…

You sound very authoritative, but some of your numbers seem odd. Do you have a source for your 30% rent figure? Most sources I see suggest a much lower number: http://www.4hoteliers.com/4hots_fshw.php?mwi=1661

Sorry, you are right. The rent figure is for a cafe, and even that might be high. And I read it in an article from a cafe owner who lost his business. Maybe he was paying too much rent.

A lot of restaurants have under 10% rent.