Ivailo Jordanov

I am a big fan of Groupon, not particularly their offers – I have never bought anything through them, rather I admire what the company has achieved in such a short time. It only shows how the Internet can enable new and exciting models.

While the promotions that Groupon offers are attractive for consumers they are quite expensive for businesses with certain cost structures, for example businesses with a higher incremental cost of sales. It is obvious that if, for example, you teach a dance class and have some empty space in your class, adding additional students costs close to nothing. If however you are selling clothes with a 50% profit margin, giving a 50% discount and further sharing the income 50/50 with Groupon is expensive.

I have recently heard a number of people mention that, they bought Groupon deals and as well as paying half price, they also received half the service.

If you consider why a business would use Groupon for a promotion, there are the obvious reasons – to attract new customers, even at a break even or a loss, in hope that they come back and pay full price at a later date or, in the case of businesses with higher profit margins, to generate a large number of sales and hence profits.

If you are trying to do both, by degrading the quality of your service to reduce cost, you are probably unlikely to succeed. Unhappy customers are unlikely to come back and pay full price. Even if they do not realize that they are getting less than normal customers, based on their experience, they are unlikely to think that your service is worth the full price.

If the cost of running a promotion on Groupon seems too high for your business and the loss is prohibitive, then this way of promotion may not be right for you, or perhaps it may be more appropriate to consider one of the smaller players (Groupon clones), who would be willing to charge a smaller commission.

Coincidentally after my previous post – “Some initial thoughts on Ping“, Techcrunch have a great post titled “The Real Social Network: Your Mobile Contacts“, which echoes my thoughts that the address book contains the “real” social connections and could be used as the foundation for a new social network, what I thought Apple could do with Ping going forward.

They summarize it very well in the following paragraph:

But imagine if Apple built social tools right into your Contacts app? Maybe it would start with short status updates (maybe this would even pull in tweets), and then it would move to something like instant messaging. Then imagine if they did something with location? All of this would be opt-in, of course, but it could be very powerful.

In the comments of my original post Donald has mentioned that Windows mobile 7 already does pull the status into the contacts app of the phone.

I am looking forward to seeing where this could go in the future.

Typeface terrorism

via Gizmodo

If you have an iPad and you do not have an app called Flipboard I suggest that you drop whatever you are doing, head to iTunes and download it (it is free). In short it is a social magazine app.

While I love the app and use it all the time, I think there are a couple of things that would make it even better (for me anyways). It is worth mentioning that the current release is the very first version of the app and no doubt the guys working on it are thinking of many exciting features for further releases. Here is my list:

Add my own feeds or sync with Google reader. If I could do that, it would completely replace my RSS reader.

A way to get back to where I was before closing the app – a bookmark of sorts. At the moment it is frustrating that I need to start from the beginning if I close and reopen the app.

Would be great if the “View on the web” and the “Close” buttons were on the bottom corners of the windows, which would make it more in tune with the way I hold the iPad.

If I am viewing an article on the web and there is a video playing in it, currently the video continues to play one I close the window – that’s not quite right.

A setting that lets me remove the comments from each article as they are currently various forms of tweets/retweets, either that or replace them with the comments from the actual post, to me those would be more relevant.

That is about all, I look forward to seeing what the future will bring for this app.

During the last few years I have often heard people wonder whether a particular product has potential on its own or is the idea meant to be a feature of a bigger system. This made me think about some of the recently successful companies. Looking back, most of them could have been a feature of bigger system. In fact in most cases I’d be inclined to say that people wouldn’t have given them much of a chance of survival on their own prior to them becoming what they are today.

Google could have been a feature of any web portal such as Yahoo, after all it is just a search box, why would you want to build a website around a search box. The Twitter status update was already a feature of Facebook, so if I can update my status on FB, why would I need another place. Groupon could have been a feature of any e-commerce system, why would I need a site that offers just one deal a day? The list goes on and on, yet not only that these companies are successful, but they are defining the internet.

This not only proves that you can take a simple concept, execute on it well and succeed, but also proves that if you believe in what you are doing, you should NOT listen to all the Bozos, who are telling you that, what you are building is not a stand alone business, but a feature of someone else’s system!

Attribution: The Bozo statement comes from “The art of the start” speech by Guy Kawasaki, who is one of my favorite speakers.