Headline, August29, 2013

''' !!! GROUPON - FACEBOOK !!! '''

Many many discern, that  Groupon is the Facebook of the now,  and years ahead!!? Some are calling Mason the next Mark Zuckerberg. ''It's a kind of comparing a Ruby and a Diamond,'' says Reid Hoffman.

The genius of Groupon model is that it can be used for any type of business. Mason likes to say that it's great for ''hidden gems''  -businesses that excel at their craft but aren't well known. Common Groupon merchants include restaurants, yoga studios, dentists, spas, photography studios and clothing boutiques. While most of the deals are local, Groupon has recently been partnering with big national retailers.

By no means is the model perfect. Some businesses have complained that the deals generate too much traffic and leads to a bad customer experience. Others says that new Groupon buyers are just one-off deal seekers who don't become repeat customers. Another complaint is that Groupon's cut of the deal is too large, making it hard for the merchant to see a profit.

The 2011 Groupon's S.E.C filing gave the first detailed look at just how meteoric Groupon's growth has been. Its annual revenue reached $713 million, up from $30.5 million the year before  -a 2,241 percent increase. Revenues then got on to be higher and higher with the number of subscribers increasing to 83 million in the first quarter of 2011, up from 1.8 million in 2009.

But at the time, the public filings also pointed to the shadow cast by Groupon's stunning rise: massive losses. As Groupon mushroomed around the globe, its operating costs surged. In 2010 Groupon's annual net loss hit $ 389.6 million, compared with the net loss of $ 1.5 million in 2008.

Mason and other Groupon execs then asserted that the aggressive growth was necessary to stake and maintain a lead.

But back to the Tale:

Many of Mason's original projects on the site were rooted in social activism: forcing Kentucky Fried Chicken to adopt more stringent animal-welfare standards, or coercing PepsiCo to package its Aquafina water in biodegradable plastic bottles. But the socially conscious efforts didn't attract enough subscribers, and they fizzled. By October 2008, the Point was on the verge of being shut down.

''Erik Lefkofsky was pressuring me to think radically differently and figure out a way, to monetize the site,'' Mason recalls.

Mason had noticed that the most popular campaigns on the Point involved group buying. So, he decided to set up a sub business dedicated to commerce rather than ideals. At first, Mason says, he thought the new business would just be a way to the bills. His friend and co-worker Aaron With came up with a the name Groupon  -a fusion of the words ''group'' and ''coupon'' 

Mason credits Lefkofsky for the shift in his focus. ''He just created a splinter for me. It was that agitation that he created that ultimately led to the formation of Groupon.'' With a 21.6 percent stake in Groupon, Lefkofsky is the single biggest investor in the company.

On October 22, 2008, Mason launched his first Groupon offer: a two-for-one pizza deal at a bar below what is now Groupon headquarters. Twenty-four Chicagoans bought it. Not long after, Groupon featured a one-hour experience in a sensory-deprivation chamber at half off. Ninety-seven people bought it, about 5% of Groupon's mailing list at the time. ''That's when we realized that people were thirsting for something like this,'' Mason said.

As the U.S. economy became mired in recession, deals were suddenly ''recession chick.'' After six months Mason decided to expand the business to Boston, and soon after that to New York and Washington. D.C.

At a board meeting in 2009, one of Groupon's board members asked Mason to consider picking up the expansion pace. He said, ''What would you have to do to launch four cities a month?'' I was like,'Oh my God, that's crazy.'

But, Mason says, ''before I knew we were launching 15 cities a month just in the United States.''

For a while, Mason couldn't keep up. ''We had a backlog of 9 to 12 months long of businesses that wanted to be featured,'' he says. He compared himself to being the only plumber in the city of Chicago.''

And the service vacuum that resulted gave rise to legion of competitors, which copied Groupon's Web site and began hawking their own local deals. There was Zoupon, You Swoop, Groop Swoop, Groupocity  -you name it.

''It was the most surreal, stomach turning experience to see these people ripping us off,'' Mason says.      

''People want to pitch him as this goofy boy wonder, or this happy-go-lucky youngster who's playfully running this company,'' says Aaron With, Mason's friend, and then editor in chief at Groupon,

But he's deeply disciplined, highly organized, extremely critical, driven, driven person. He'll hold everyone accountable to the highest standard. And he can usually do your job better than you can. He's extremely well-rounded and he knows every aspect of the business.''

Some years ago, Mason's eyes would ever light up when he talked about the numbers he was dreaming of:

''Local commerce reflects a humongous space, and we've just gotten started. It's a Trillion Dollar in the U.S., and $ 14 Trillion globally. That's the space we are playing in.''

But among the companies now offering competing Groupon-like services are Facebook, Google, AT&T and The New York Times. Groupon is still the undisputed leader in the daily-deal business, but as more and more competitors jump in, it will be harder and harder to thrive

In a cautionary e-mail  that Mason wrote to his colleagues, this what he surmised : In the year ahead, we will either be on our way to becoming one of the great Technology brands that define our generation. or a cool idea by people who were out executed and out innovated by others that were smarter and harder working.''

The Samurai and the all the students of the world must pause, stop and reflect on this insight and advise!!

The Post continues in all its uniqueness. Don't miss the next one.

With respectful dedication to the Students, Professors and Teachers of Singapore. See ya all on the World Students Society Computers-Internet-Wireless : '' !! Star Wars !!''

Good Night & God Bless!

SAM Daily Times - the Voice of the Voiceless