Grace at GA

Blogging my way through Business Fundamentals and Tactics.

[soupbunnie]

I got totally derailed after I went to SXSW Interactive this year. Here’s a clip from one of my favorite speakers, Elon Musk, founder of SpaceX, Tesla and Paypal - on thinking big and dedicating his life’s work for the greater good of humanity, whether it be through space, electric vehicles or the Internet. Yes, he’s worried about whether or not we are going to move a colony to Mars in his lifetime, and he’s going to beat NASA too it by building his own private rocketships, because the sun is going to explode soon!

My other big takeaways from SXSW this year:

Rise of the Physical/Digital to Analog/Makers of Hardware - Brooklyn’s Makerbot leading the charge towards self-replication

Big Data, Big Problems - Nate Silver on data + insights, and the rise of privacy/intimacy in the face of too much data (like Path)

The Message, Not the Messenger - It’s not about the next Myspace, it’s about the utility of social media and how it actually improves your life

The Science of Virality - loved Jonah Berger’s talk on his new book “Contagious”

Now back to our regularly scheduled programming.

[graceatga]

Here's the link to Groupon's income statement / P&L over the last five years. Still trying to make sense of what went wrong solely by looking at these numbers. Some jargon I'm deciphering includes:

EBIT = earnings before interest and taxes

SG&A = selling, general and administrative expenses

What is interest expense?

Also, how does having gone public reflect in the income statement?

Groupon has never been profitable in its 5 years of existence. It seems to have very high costs that eat into its profit margin. 

[graceatga]

English major completes first financial model

Booyah. Just kidding. That was painful.

[graceatga]

General Assembly co-founder Matt Brimer gave us an intro to NYC's awesome startup community and how GA started in NYC. I was really impressed by his thoughtfulness. One quote I want to save for work purposes:

"In 2008, if you asked where tech innovation was happening, hands down you would have said Boston. Now? Hands down, NYC. In just a short period."

Yesterday was a great McKinsey happy hour and partnership kick-off to our course. Met lots of fun people including as part of GA's Web Dev Immersive, which makes me want to learn to code too—they're learning HTML, CSS, Javascript. Surely those languages will be useful as well in anything I do. The McKinsey folks were friendly and talked about how their value prop is the mindset they apply to organizational problems in all different sectors—the McKinsey way of thinking.

[digg]

(This is for Groupon employees, but I’m posting it publicly since it will leak anyway) People of Groupon, After four and a half intense and wonderful years as CEO of Groupon, I’ve decided that I’d like to spend more time with my family. Just kidding - I was fired today. If you’re wondering why… you haven’t been paying attention. From controversial metrics in our S1 to our material weakness to two quarters of missing our own expectations and a stock price that’s hovering around one quarter of our listing price, the events of the last year and a half speak for themselves. As CEO, I am accountable. You are doing amazing things at Groupon, and you deserve the outside world to give you a second chance. I’m getting in the way of that. A fresh CEO earns you that chance. The board is aligned behind the strategy we’ve shared over the last few months, and I’ve never seen you working together more effectively as a global company - it’s time to give Groupon a relief valve from the public noise. For those who are concerned about me, please don’t be - I love Groupon, and I’m terribly proud of what we’ve created. I’m OK with having failed at this part of the journey. If Groupon was Battletoads, it would be like I made it all the way to the Terra Tubes without dying on my first ever play through. I am so lucky to have had the opportunity to take the company this far with all of you. I’ll now take some time to decompress (FYI I’m looking for a good fat camp to lose my Groupon 40, if anyone has a suggestion), and then maybe I’ll figure out how to channel this experience into something productive. If there’s one piece of wisdom that this simple pilgrim would like to impart upon you: have the courage to start with the customer. My biggest regrets are the moments that I let a lack of data override my intuition on what’s best for our customers. This leadership change gives you some breathing room to break bad habits and deliver sustainable customer happiness - don’t waste the opportunity! I will miss you terribly. Love, Andrew

Andrew Mason’s awesome goodbye email sent after he got fired from Groupon today (via digg)

Groupon is trending today!

[graceatga]

First Day of Class

I can barely read my own handwriting, but there it is. My first business model canvas.

Groupon is my assigned company. I have to put aside my personal feelings about Groupon—the time(s) my Groupon expired and I couldn't get my money back, or felt inadequately reminded to use it. The difficulty of getting the local business's technology to accept my Groupon voucher code. The annoying emails. The disrespect of being a "just" a Groupon purchaser, instead of being seen as a "fully fledged" customer who is deserving of first-class treatment.

Last night we had to analyze the different parts of Groupon's existing business model, flaws and all. Three building blocks my team discussed:

Groupon is a marketplace platform that is both B2B and B2C, catering to different audiences. The value propositions differ for both - offering local businesses increased revenue and promotion opportunities, for example, while customers can access discounts and deals for new products and services they may not have heard of before. 

We narrowed down customer segmentation to the coupon clippers. It's for people who prize convenience, like to passively receive emails and easily make purchases wherever they are given a short timeframe. They are mass-market folk—this is no Gilt—and motivated by instant gratification.

Some key resources of Groupon include content creators who write those witty descriptions that make you want to go skydiving or cupcake tasting, immediately. There are the engineers who build the actual platform. There is the technology itself. As well as a payment transaction system or POS of sorts to ensure that the e-commerce aspect goes smoothly. 

We have to do more research into Groupon's revenue stream, and how it works with the business owners to incentivize them to come aboard. It should be fun to take a closer look under the hood—especially given the struggles of other flash sales sites like it, such as LivingSocial's (my preferred daily deal site) recent news that it is inching its way towards bankruptcy. Groupon thrived when the economy was good, but when times are tough, people don't have as much money to spend. That's one hypothesis.