Groupon recently filed to have an Initial Public Offering of their company. Why would you IPO after so much growth? Easy, they're trying to cash out before their company crumbles around them.
I know this is exceptionally doom-and-gloom for me, and I am usually more nuanced, but frankly, I don't see how Groupon can stay competitive as-is. Groupon has depended on first-to-market advantage, and I don't see any additional ways that they can stay competitive.
1. Groupon's Brand is at Risk
Groupon is having issues with vendors. There are reports that vendors are treated poorly by Groupon. Now, this in-and-of-itself isn't a death knell, as OpenTable does very well treating restaurants like crap, and TicketMaster / LiveNation does very well treating both artists and consumers like crap. Cable companies like TimeWarner, Comcast, et al, all have monopolies in their area for broadband service. Consequently, all of these other brands don't need to really make consumers feel very good about their brands, because they all have the monopolistic advantage of being gatekeeper. Groupon has no such claim, because ...
2. Social Media Can Get Replaced Overnight
Everyone's jumping on board. Google, Living Social, Steam, and various travel sites are all examples. If Groupon lacks a unique product or some other competitive edge, what do they have? An Android and iPhone app? How long until everyone has their own? 6 months, tops?
Still have a Friendster account? I mean, MySpace? I mean, Facebook? No, wait, I mean Google Plus? When your product is free to consumers, and there's nothing like a ginormous database (like photo-sharing services or email) to lock someone in, the consumer will be as loyal as your features you offer, minus how poorly you treat them. What's the incentive I have as a consumer to be loyal to Groupon, than say, Living Social or OpenTable or the countless other people jumping on the deal-a-day bandwagon?
3. Groupon Doesn't Have Content To Leverage
Groupon isn't even as fortunate as say, Yahoo search. Yahoo was early to market with a decent search tool in the 1990s. However, unlike Groupon, where deals change every day, Yahoo had accumulated a wealth of content in its search and organization of web metadata. That's a head start that gave Yahoo's search over a decade life-span. Groupon
Ultimately, what Groupon did wasn't create a unique brand, they created an entirely new advertising model. Is it innovative? Absolutely. Is it a good thing for consumers? Absolutely. The web has been facing for years the prospect of people paying less and less attention to advertising, especially with basic AdBlock software available for major browsers. Groupon popularized a new advertising model where vendors essentially paid for advertising to consumers that they had 100% guarantee would either buy their product. (Or not spend the Groupon, which is free money.)
And, I take that back. Groupon didn't really invent it. At the very least, I should mention woot.com, which is a niche geek/gadget deal-a-day site that's been around for years.
7/19/2011
Why I'm Not Buying Groupon's IPO
7/15/2011
Proposals Submitted for SLCC: Identity, Storytelling, Choice
After consulting with the Second Life Community Convention (SLCC) organizers and track leaders, I've submitted proposals for three slots:
"Avatar Identity: Privacy and Transparency in Social Media" (panel discussion + Q&A)
"Storytelling Secrets for Successful Virtual Environments" (speakers + Q&A)
"Choosing the Right Virtual World for the Right Project" (speakers + workshop)
I'll post more details as I fill in speakers and such. :)
7/05/2011
Will Second Life and Metaverse Abruptly End Tomorrow?
Well, will it? Some say it will. "Who?" you ask? Well, allow me dodge that question and instead go to FUD.
Here's a generic list of concerns:
- Technology adoption is difficult to predict.
- It is not clear what new technologies may challenge current ones.
- It is not clear if current platform providers like Linden Lab will continue to be stable.
- The older generation is resistant to change.
- Performance of technology is somewhat suboptimal, sometimes, for some uses.
No, of course not. I was just making a point about how stupid blogs and "news" articles are for using bait-and-switch leading questions in headlines to get readers to consume their content based out of fear rather than legitimate interest in a subject. And it's a rampant disease that's spread into journalism.
Next time you see a blog or a news site have a headline with a question, just add one comment: FUD. Because that's the basis for them getting you to read it: fear, uncertainty, doubt.
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