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Sunday Musings #18

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photo(That’s Finn, or “el fatto gato” as we call him. He’s actually lost quite a bit of weight. I’ve always been anti-cat, but this guy is kind of a sweetheart, so I’ve turned a bit on that topic.)   

The intriguing story of Groupon and Andrew Mason. I’m fascinated by the meteoric rise and even faster fall from grace that Groupon experienced, including the recent ousting of its Founder and CEO. The service has been lambasted by many in the media and small biz community because of the math behind it; 50%-70% discounts given by merchants combined with a 50% revenue haul by Groupon itself from each executed deal. Yikes. Businesses are walking away with $.25 on the dollar or less, depending on markup. In the Fast Company article linked above, it is mentioned that a positive aspect of Groupon that is often overlooked by merchants is the promotion and advertising element. In other words, even if the deal loses money for the business, is that money well spent when viewed as advertising costs? It’s an interesting one, and I don’t have the answer. Personally, I’ve recommended against Groupon for the majority of my clients. I’ve always viewed it as a last-ditch effort or as a market entry tactic once you’ve exhausted other approaches and resources. At the end of the day, the real question is what a business is willing to do to maintain a potential one-time customer. I recently took advantage of an Amazon Local deal for a Brooklyn bike shop because it was very well timed with a need I have. The deal offered a $70 bike tune-up for $35. The shop is about a mile or so away, as opposed to the neighborhood one that is a block away (and the one I planned on bringing my bike to). Right now, I plan to go there but have no real intention of becoming a repeat customer (because of the distance/inconvenience). Unless, of course, they blow my socks off. I wonder how many participating Groupon / flash deal companies focus on that part of the equation…

Native advertising and grapes. The world went nuts when Instagram finally released a video function last week, particularly with “RIP Vine” sentiments. This is only a few days after I touted Vine as a “production platform“. And now, Gary V., the polarizing entrepreneur / wine god / social media “guru” (blech), has announced the opening of the first-ever agency dedicated to Vine stars (of course, it’s called Grape Story). Rumor has it that Virgin Mobile is signed on as a brand client, and that is very telling. This isn’t a move to find and manage the careers of 6-second video stars. It’s all about native advertising and branded content, plain and simple. Gary is smart and is fully taking advantage of the convergence of these two trends.

BIG innovation. I’m not usually a trash diver, but since moving to NYC, I’ve come to realize there are some gems out there if you keep your eyes open (looking around my apartment, I count a wall mirror, an end table, and a wine rack amongst my recent acquisitions). Last week, a neighbor threw out their entire Fast Company library, which I happily helped myself to. The pub named Nike it’s Most Innovative company of 2013 and the article is well worth the read. One concept struck me as most notable, though. Nike’s CEO, Mark Parker, discusses the “bullshit meter” that a leader must have when determining what products or features to chase and which ones to discard. It’s not an easy task, requiring a spirited combination of experience, expertise, and gut instinct. From the article: “Parker says he often feels like Tom Hanks in Big – a kid at a toy company whose job is to approve only the products he has fun with.” What a fantastic concept. Overly simplified, yes, but my suspicion is that most innovators could release better products with a Tom Hanks character involved in the process.

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Growth obsessed startup co-founder (MusicBox) and strategist-for-hire. startupgrowthguy.com mymusicbox.me

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  1. Pingback: Sunday Musings #24 | An Unconventional Blog for Unconventional Marketers

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