I managed to confuse a shopkeeper by turning down a “two for the price of one” offer recently. I only wanted one. I’m probably not Groupon’s target customer.
However I’ve been curious about them as a company; millions of customers have used Groupon and been happy with the deal they got. But not everyone, there’s a rising bubble of dissatisfaction.
There’s negative press about the Groupon experience from both customers and businesses;
- several reports of poorer service to those customers using Groupon, referencing the “Groupon ghetto“
- they may not be fulfilling their stated terms and conditions, according to one analyst who used a Groupon hotel offer.
- In fact the company has had so many disgruntled customers, that they’ve had to pay more to solve problems than expected to solve issues, which has forced them to re-state earnings.
- For many businesses the Groupon promotions don’t generate the long term business they’re hoping for
I’ve watched the company grow, and the growth has been huge, the buzz has been wild. And when they announced in June last year that they were going to IPO I was curious how it would turn out.
I think the most telling article I’ve read about Groupon is an interview with Groupon’s CEO Andrew Mason in November’s Vanity Fair. He’s a guy full of ideas and infectious energy, he’s created a company with a distinctive culture that grows on innovation. He wants to retain the startup culture. But he seems to lack discipline, and when you run a big company well it takes discipline, when you’re a listed company the level required rises – and if you don’t have it you shouldn’t list. I’m no Warren Buffet, but that interview alone was enough to convince me not to invest.
That was November.
Since then the analysts have been hard at work, posting warnings about the cost of incompetence, and the auditor last month reported a “material weakness” to the SEC in connection with their figures, and other examples of “creative” accounting have been reported.
If Groupon fails it will in once sense be a shame – they’ve had a hell of a ride creating a company with an original company culture.
But it’s a good lesson. To really be successful in business you need both the creative, original thinkers and the analytical, structured types – it’s a very rare person who excels on both sides. If you’re going into business hire your opposite; if you’re the creative type bring in a CFO or COO to handle the analytical side. If you’re the analytical type hire a great business development director. Acknowledge and respect what the other brings – your company needs both.