Doing it with GroupOn

December 27th, 2010 § 2 comments § permalink

There is a big discussion going on about GroupOn‘s business model. After the company refused Google’s acquisition offer, nobody could decide whether the company owners were just too crazy or too brilliant, confident in their business ability to outperform any kind of offer Google could come up with–and that after Google virtually double its initial offer.

John Battelle is one of the ones who think that GroupOn made the right choice. He writes:

Good sources have told me that GroupOn is growing at 50 percent a month, with a revenue run rate of nearly $2 billion a year (based on last month’s revenues). By next month, that run rate may well hit $2.7 billion. The month after that, should the growth continue, the run rate would clear $4 billion.

Battelle attributes this to a combination of factors (relationships, location, and timing–see the article for a more in-depth explanation) that make GroupOn’s appeal to small business pretty much irresistible. As he notes in his article, that run rate is the triple of what Google itself experienced in its early years.

I was talking to a friend a while back about social buying and he said the major problem that will affect and eventually kill GroupOn’s–and all of it other clones, by extension–is churn, that is, the fact the a lot of the offers were creating problems for the businesses using the platform. In fact, there have been a lot of reports about people being mistreated if they came bearing a GroupOn or equivalent coupon, and I have heard some of those stories first-hand. In many of those cases, the business owners had miscalculated what they could or should offer and were unhappy with the entire experience, consequently becoming less and less interested in working again with GroupOn or their local clone.

But I believe that the churn we are seeing right now is just a consequence of the way new markets behave. If Battelle is right–and I believe he is–the rate of churn will fall with time as business begin to find their sweet spots in the social buying ecosystem. I don’t see why, for example, GroupOn can’t offer a tool that will allow business to input some parameters and find the ideal price for a given offer. Granted, that will never be exactly precise but will give most business owners using the platform a way to avoid the most extreme problems.

But, ultimately, I believe that GroupOn will succeed because it’s changing the way people are relating to those business using social buying to attract them. Recently, talking to two other friends, they told me how our local clones had impacted their buying patterns.

One of them, a 40-ish divorced guy, said he wouldn’t dine out anymore unless he had a coupon and that the coupons were helping him to raise the bar with regards the kind of places he was able to go to in a single month. Previously, going to a more expensive place meant he was able to do that just a couple times each month. With the help of coupons, he was going to more expensive places one or more times each week. That’s a huge change in spending patterns and one that’s benefitting him and the restaurants he likes.

But other guy, a 30-year-old or so guy, said social buying was actually helping him to get laid. You see, this is a single guy who is using a variety of coupons–for restaurants, spas, clothing, small items–to impress and convince women to have sex with him. He is still using a considerable amount of money, but GroupOn and the likes are helping him to spend that money in a more efficient way towards his objects–which, right now, are pretty much limited to getting laid as many times as possible with as many women as possible. And it’s pretty evident from the way the market works that any business that helps people to get laid–or find any measure of sexual satisfaction for the matter–is in much better condition to thrive.

So there you have it: people are getting laid using GroupOn. That makes GroupOn business position a much stronger one. Battelle is right, from the small business’ point of view–but my friend is also right, from the consumer’s point of view.

Either way, GroupOn wins.

More companies join DataPortability

January 10th, 2008 § 4 comments § permalink

Two days ago, Google and Facebook shook the industry when they decided to join the DataPortability Workgroup, as enthusiastically reported by Read/Write Web. Today, with the same enthusiasm–and not without a certain sense of disbelief–Read/Write Web is reporting that three more big players have joined the initiative: Flickr, SixApart and LinkedIn. As with Google and Facebook, their representatives will not be mere employees but people with a history of involvement with the issues sponsored by DataPortability.

It’s quite obvious Google and Facebook move was what prompted those three companies to join the group. Likewise, we can certainly expect more companies to join the group in the coming days and months. So what began as an idea to provide guidance to the industry may become a real force for the implementation of portability standards in the next years.

The more important thing about the whole thing is that all standards supported by the DataPortability Workgroup are open and, together, represent a natural deterrent against the kind of attitude we often see expressed by Microsoft, that is, embracing standards and later changing them to make them slightly incompatible with other implementations to keep their dominant position in the industry.

This year seems more and more promising for open standards. OpenId is being discussed and implemented by lots of applications, and much more is happening each day. The next couple of months may eventually become marks in the history of the Internet. I certainly hope so.

A few notes on Twitter

January 9th, 2008 § 0 comments § permalink

[1] talk in a light, high-pitched voice
[2] idle or ignorant talk

The Oxford Pocket Dictionary, 2007 edition

In light of those definitions, one could wonder why Twitter chose such a name. Then again, maybe the joke is one us.

I’ve been using Twitter intermittently for a few of months now. I started using it in a BarCamp for which I provided live coverage for my Portuguese blog readers, and decide to experiment with both formats simultaneously: I would write a more elaborate entry after a particular discussions, and would try to post tidbits of the conversation on Twitter while people were talking.

The experience ultimately left me dissatisfied with Twitter. Maybe I’m not a multi-tasking person, but trying to post to Twitter, while listening to people talk, and also trying to keep with replies to the Twitter entries proved too distracting to me.

After a couple months of usage, I can’t say I have any special insights about Twitter. Twitter seems to be IRC done socially. IRC has long been a popular application among a certain kind of Internet user, but it depends on a very specific application and clear choice about what channels one should follow. Twitter changes the equation by allowing a user to subscribe to people instead of channels. Obviously, its lacks the focus of a dedicated IRC channel, although it provides a way for its users to reach across followers and follow specific subjects.

This mechanism can be used efficiently by people trying to keep or meetings and conferences, although some users will be uncomfortable with the flood of information tracking can unleash. But considering that neither IRC nor IM can provide such immediacy across people not linked by personal contacts, Twitter has a definitive advantage here.

The ability to follow people and occasionally track specific channels may prove the only advantage of Twitter to me. Using it, I’m able to keep updated about the notational Zeitgeist of the people I’m following–and, indirectly, of the people they are in turn following. Also, if the people I follow belong to my market, I may be able to glimpse trends by seeing what it’s calling their attention during the day. Of course, this can be quite misleading and people seeking insight may not find what they are looking for.

Twitter is a noisy tool. Keeping it continuously on is a sure way to lower productivity. More than IM, because most people still respect status messages, while Twitter gives an implicit permission to call your attention–if you are following somebody, it’s quite obvious you want to see what he or she is posting. This stream of consciousness can be very distracting.

Ultimately, Twitter has outsourced office talk, and the same restrictions apply. You may think people are not paying attention only to find your boss listening over your shoulder.

I will probably keep using Twitter by applying the same logic I apply to IM. I follow status conventions, and I rarely allow people to bother me when I’m signaling I’m busy. With Twitter, this mean turning it off whenever I need to focus on a problem. What Twitter itself may gain with my participation remains to be seem.

Facebook and Google join the DataPortability Workgroup

January 8th, 2008 § 0 comments § permalink

Read/Write Web is reporting–with great enthusiasm, I may add–the both Google and Facebook have agreed to join the DataPortability Workgroup. I have not found any evidence of the news on the DataPortability site itself, but coming from Read/Write Web there is no chance the news are no true. It’s interesting to realize the announcement came just a few days after the controversy around the removal of Scoble’s account from Facebook.

The DataPortability group is an initiative working to promote the reuse and transparent transference of user data across Web applications. This is a huge challenge, but it’s good to see some smart people working on the multiple issues involved. The presence of two of the most social companies in existence today will certainly give the project a new measure of legitimacy–especially considering the people who will represent those two companies on the group.

One of the early documentos created by the group shows that one of the primary objectives of the group is to use existing technology to leverage the transformations needed to reach their goal. This is a good strategy since it improves the chances the recommendations made by the group will be followed and that they will be easy to implement.

With Google and Facebook joining DataPortabily, the eventual creation of a portability API may represent a turning pointing for Web applications as it will empower users and create an entire new industry around the possibilities of managing such data. Of course, the entire problem revolves around issues of privacy and that will be a tough nut to crack. Hopefully, with Google and Facebook, and the other companies that will surely follow their lead, working on the problem, an interesting and useful solution may arrive soon.

As the Read/Write piece says, that may represent a magical time for the development Web. That’s what we are hoping for, anyway.

Microsoft reinventing itself?

October 8th, 2006 § Comments Off on Microsoft reinventing itself? § permalink

Via BoingBoing, an interesting analysis on Wired about Ray Ozzie‘s ascension as Microsoft’s new chief software architect, and what that means in light of the company’s current business model and role as an innovator.

Microsoft is no longer seem as the boogeyman of the software industry, even though it still holds its dominant position in the market. The articles does an interesting job in detailing the historical reasons for that and–even though it fails to resist the temptation to compare Microsoft to IBM–it also points out the possibilities represented by the moves already initiated by Ozzie and his allies at Microsoft. Nobody would say, a few years ago, that users and developers using Internet Explorer would have to deal with the consequences of something like the Eolas ruling. That’s what happened, nonetheless, and it’s one of the things the represent the shift in market perception about Microsoft–probably as much as the impact of open source and interoperability efforts–in the way Microsoft is trying to reeducate itself for a new generation of consumers.

The article reflects some of the doom mantras that mirror the zelot style of the declared enemies of the company, but I think bridges are much more interesting in this case. I have been working with companies which base their products exclusively on Microsoft technology for yeqrs already and seeing the way they look at the “world outside,” it’s easy to understand the disbelief expressed by the article–as evidenced by Cory Doctorow’s reaction to the article.

Nonetheless, I think it’s easy to see what a radical change in Microsoft would means to industry. Ironically, I think that may happen as a result of automatic inertia inside the company, something that would not be visible for outsiders today. Since I’m an outsider as well, I can’t say for sure that that is what going to happen. In a company like Microsoft, though, anything is possible.

The future will tell which vision of Microsoft reinvention will come to pass. But it would not be the first time the company succeeded–and maybe they will succeed for better this time, learning from the past.

Irony in broadband Internet commercial

June 3rd, 2005 § Comments Off on Irony in broadband Internet commercial § permalink

Just the other I was listening to a favorite radio station when I heard a commercial for a broadband Internet provider. In the commercial, one of the characters asked another if he could download music using the advertised service.

Considering that I never heard someone talking about actually buying music through such services in Brazil — many of those services are not even supported here — the commercial is very ironic.

Internet providers here certainly don’t care about the legality of people downloading music through their servers. Without going into the merits of the issue, I’d love to see what would happen if a commercial like that were aired in the US. 😛

Is SCO out of its corporate mind?

November 29th, 2004 § 6 comments § permalink

What the heck? Would someone please tell me what that means? (This is a screenshot taken from the SCO site this morning.)

Didn’t anybody at SCO realized they have that banner on the site yet?

Update: They have noticed the banner and changed it. Another interesting screenshot and an article can be found at Newsforge.

RSS and knowledge

October 23rd, 2003 § Comments Off on RSS and knowledge § permalink

It’s amusing how much dependent on certain technologies we become. We get used to having a given resource available to use anytime, and when we lose access to it, even temporarily, we realize we need or value it more than we thought possible. I experienced this recently with regards to RSS and aggregation.

One of my daily activities, which I perform unfailing everyday when I arrive in my working place, is to read the news and posts gathered by my aggregator from the sites to which I’m subscribed. When I changed jobs recently, this routine was interrupted for a few days, while I got settled in my new job. As a result, I felt myself completed out of touch with the world. And, in a certain way, I was out of touch with it, since I aggregate not only blogs, but news agencies as well. Even my daily intake of news about what is going on in the world was disturbed.

I found interesting to realize how much of my knowledge and daily updating are concentrated on a single tool. Granted, I have many other sources of information outside of the Web, but much of what I need and learn everyday comes to me via RSS. However trivial many blog posts seem, most times they lead me or contribute to lead me to other places where information — and quality information — can be found. And, in truth, trivial posts are but a minority of the posts I see everyday. Even sites with clear personal purposes can contain a wealth of knowledge unheard of before — mainly because they aggregate current and practical knowledge.

As much as people criticize the effect blogs are having on other important pieces of Web infrastructure — notably Google — the fact remains that blogs have become a indispensable tool in and of themselves. Even though the percentage of personal blogs, with a sole purpose of informing family and friends about what is going on in the life of their authors, is vastly superior to that of blogs with defined focus and purpose in the areas of interest of a given person, the information generated daily by those latter, be it direct or indirect, easily exceeds the capacity of absorption of any person.

Those days without RSS made me noticed how much this technology is an essential part of my process of growing professionally — and, in a certain way, personally as well. It always interesting to see how the simplest things can have the greatest impact on our lives.

Google with thumbnails?

July 8th, 2003 § 2 comments § permalink

Google with thumbnails: an interesting feature at ICQ’s Google Search. I’m not sure whether this is a new or planned Google feature or just an ICQ customization.

It’s time to bury Netscape

June 9th, 2003 § 8 comments § permalink

This month marks the sixth birthday anniversary of Netscape Navigator 4, whose first non-beta version was released in July 1997. This version, one of the most famous in the history of the Web, was an attempt by Netscape to regain the market share it was losing to Microsoft, whose Internet Explorer was making huge inroads in the Web browser market. Even with the added support to then emerging Web standards, Netscape 4 proved itself unable to face Internet Explorer 4, whose support to new formats and technologies was incontestably better at the time. When Netscape made the fatidic decision of opening the source code of its flagship product and later of rewriting it from the scrath it became clear that an era had ended.

Although it lost the market, Netscape 4 continued to be used for many years, and it’s still used in some companies. Many Web development shops have labored to create sites that support this six-year-old browsers at the expenses of Web standards, usability and accessibility. I think it’s time our customers recognize the truth that Netscape 4 is dead. It makes no sense to support a browser which has little support for standards that are already a decade old and no support at all for modern standards — it only makes development harder and costlier. I have once developed a site that supported Netscape 4 because one man — yes, you read that correctly — in the whole company used that browser.

So. next time a customer asks for Netscape 4 support, politely explain to him the reasons that is not feasible anymore. Your customer and the Web standards will surely be grateful in the long run.

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