Wednesday, July 27, 2011

Competition, Humor, & IPO Drives Social Media Business

Groupon's CEO Andrew Mason
At least that’s what Groupon's CEO Andrew Mason claims. He does not mind the very many plagiarists who are copying his business plan. He thinks of them as healthy competitors.
Perhaps LivingSocial and Bloomspot might Groupon’s biggest competitors out there, it does not stop Mason to invent and pursue diversification to over-run the competitors’ businesses.  And he is pretty much accomplishing it. 
I’ve even compared the changes of my involvement with the coupons above – as of today, I’ve purchased 19 deals on LivingSocial (but I've started using it way earlier than Groupon), 17 – on Groupon (just within the last six months), and only 5 – on Bloomspot, but that does not mean it’s BETTER, it only means that for me it works better – the deals that the coupon newsletter offers tailor better to what I’M looking for – spa services, entertainment activities, cultural activities, bars and restaurants, fitness, travel…It might be different for you.

 Either way, the last two years have marked the “Coupon years” – it’s the new trend that, I still wonder up until this day, didn’t take off earlier than that. Don’t we all like sales, coupons, deals??? But only recently it’s been invented and presented to us in the way that blew up our minds. We are all hooked on it. Even when I try to pass the deals around to my friends, they always shoot back to me saying “Hey, I’ve got this deal. I’m also on Groupon (or LivingSocial)…”
Those VCs (venture capitalists) who were able to recognize the long-lasting benefits of the coupon sites early in the game – are geniuses. I’m sure they’ve been already planning their retirement on the Bahamas… Still, the new coupon sites grow like mushrooms…
This is how Mason defines his competition, he divided it into three categories:

1.    Small clones
2.    Entries by existing corporate powerhouses, such as Google Inc, which has launched a competing service, and Inc, which backs LivingSocial
3.    "People out of left field," meaning they have a twist on Groupon's model that Groupon has not come up with yet
To win over the competition, Mason uses a simple philosophy behind the growth of his company: they "build a product that makes (customers) love us more than anybody else."
At the same time, he is trying to drive Groupon from "being a sales and marketing company to more of a tech company." But many specialists say that he won’t find much of engineering and technology talent in Chicago, he needs to move to Silicon Valley, where there is plenty of the much needed talent.
But what looks as a full-time job – handling – this is NOT all that Mason’s doing. Apparently, he is working on a book called "Unleash the Power Within: Self Help for Self Helpers."
And not that the site has 83 million subscribers and deals with nearly 57,000 local merchants in 43 countries. The investor community has pegged its value between $15 billion and $20 billion. His IPO? Expecting around $750 milion…
A bit of BIO:
Groupon’s origins – Chicago. is not Mason's first company. It evolved from a venture called the Point, a site to improve online organizing and fund-raising. Mason dropped out of graduate school in public policy at the University of Chicago to work on the business. He studied music. Before that, as a teenager, he started a business to home-deliver bagels on weekends. He likes to think outside the box, which sometimes causes him troubles – just recall Groupon’s ads from last year that appeared to mock issues such as Chinese oppression in Tibet and the threatened rain forests. There was a public outcry and the company pulled the campaign.
Do you know ANYONE who is not using the coupon sites? He/she might be a dinosaur...

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