August 4, 2010
The facts contradict Groupon’s spin machine
Ah to be a 24 year old CEO of a hot company again. The mistakes I would not make… Well the CEO’s job is to be optimistic and put a positive spin on things to the press, but it is quite embarrassing when you get caught red handed with your staff contradicting you. Ok, now to the fun stuff, Groupon’s latest gaff.
Groupon has been in the news lately for forcing merchants into overselling their inventory and causing excessive strain on the merchant. MSNBC had something on this just this week. In that article, Mason says: “CEO and founder Andrew Mason of Groupon says the company explains the risk shops take when they sign on. It tells its 30,000 clients not to expect to turn a profit on the deals and suggests they limit the number of coupons they sell.”
While the head is spinning to the media, the body is doing something else. Below is an actual email to a merchant from a Groupon sales person. (Yes Mr. Lawyer I have the entire email if you want proof of authenticity).
Hi XXXX,
So the verdict is as follows, the city planner is uncomfortable with doing a main feature that isn't 50% off and has less that 1000 tickets to sell. It sets a precedent for other businesses to be loose with the numbers and we would prefer not to allow that.
Hummm. Sounds like the sales people are NOT letting merchants cap the vouchers they sell and are pressing them for steeper discounts than the merchant is comfortable with. Wouldn’t want to set a precedent of doing deals that are actually good for a merchant now would we? Unfortunately this heavy hand is becoming more the norm that I hear from merchants in the field.
And yes again this week two merchants that we featured on Tippr were contacted by Groupon lawyers and threatened with law suits for running a promotion on Tippr after running on Groupon. Their lawyers are very aggressive enforcing the often overlooked exclusivity clause in the Groupon contract. No Tippr doesn’t have an exclusivity. That is bad for merchant. Why would we want to limit the ways our merchants can advertise?
I sincerely hope Groupon continues to annoy merchants like this. It is good for Tippr.
Posted by Martin at 1:24 PM | Comments (0) | TrackBack
July 20, 2010
Yet another Groupon Fail
Ok, you have all been reading lately about how the big daily deal sites are hurting small merchants and doing more harm than good. So far I have stayed out of this one. But a friend sent me this picture from a restaurant in NYC and I just have to post it.
![IMG_0021[1]](http://www.deepgreencrystals.com/images/YetanotherGrouponFail_1228D/IMG_00211.jpg "IMG_0021[1]")
Lets see… Humm… “Groupon Customers are just deal hounds scamming my business so I am going to put up a warning to them on my front door.” That one has got to hurt.
Posted by Martin at 8:39 PM | Comments (0) | TrackBack
June 9, 2010
Good intentions gone bad
I may be a helpless romantic and optimist, but I generally believe that most founders of start-ups are trying to do good and create great products. Being an entrepreneur myself, I tend to believe hard work and innovation will win customer’s hearts and minds. There are obviously some people in the business just to make a quick buck on a trend. Those I am not so charitable about. Unfortunately it seems like we have a bad actor coming into the Group Commerce / Daily deal space in HomeRun.com. When they started in San Francisco sourcing their own great deals and I sent a “Welcome to the party” note. I love people passionate about the deal space, competition is good.
But recently, things have taken an odd turn over there. Suddenly HomeRun.com has dozens of cities overnight. How did that happen? Well what they did is write a scraper of other deal sites like Tippr, Grouon and Living Social. These deals are presented as “friends of HomeRun” even though no-one from HomeRun has ever contacted us over here at Tippr. The deals are re-framed in the HR UI and presented with a “buynow” button. Unfortunately the “buynow” button doesn’t buy the deal, it pops up a message to get you to subscribe to HomeRun.com’s proprietary email list. When you do that, you are then sent over to Tippr.com where you are faced with another “buy now” button. Putting aside all of the obvious poor user experience issues (and the lack of windownew), this kind of thing is just not in the spirit of on-line commerce. This is bad acting. HomeRun.com is using Tippr without permission to build their own in-house list. They are not adding any value to the customer experience. In fact I believe they are degrading the customer experience significantly.
A funny twist on this unfortunate situation is that Tippr is the most aggregator friendly deal site out there. Today we announced the acquisition of FanForce and the extension of our deal platform to white labels powering lots of brands. Other deal sites explicitly prohibit their deals from being aggregated. We believe daily deals should be distributed everywhere. But not without attribution. Not without authorization. Not in a poor customer experience. If you see Tippr deals elsewhere on the web, please let us know. We want you to see Tippr deals in lots of places, but we want to be a part of it and ensure a great customer experience.
Posted by Martin at 2:38 PM | Comments (2) | TrackBack
May 20, 2010
The heavy hand of Groupon
I have been in the technology business for a very long time. There is always a darling of the moment. One such darling is Groupon (disclosure my company Tippr is in competition with them). I am always intrigued by how many of these darlings screw up their position and customer good will by being heavy handed in some clumsy way. Facebook is getting the riot act recently over their heavy handed Privacy Policy changes. Google has lost some luster over collection of the geocode of your home WIFI (and sucking some data) without your consent. Groupon seems to still be in the honeymoon phase, but there are an increasing number of cracks starting.
Most people saw that Groupon was sued in class action for violating consumer protection laws and quickly settled it with an offhand joke. I don’t tend to think flaunting consumer protection laws is a joke.
Three more came through our merchant calls at Tippr this week that the general public doesn’t know about yet. I am just here to help.
First up: the “Groupon Platinum Partner program”. Google it and you will find nothing. It is not on their web site, not in any of their press. Because it is a 24 month exclusive contract with a Merchant that locks out any other group buying or on-line promotion partner for the merchant. The terms would make Microsoft lawyers proud. Merchant signs up for 24 months to only offer daily deal promotions through Groupon. Groupon pays a spiff in the back-end if the contract is upheld. Now of course any two businesses can decide to have an exclusive relationship anytime they want. But this contract goes beyond the pale in terms of penalties on merchants and the scope of exclusivity. What if Groupon underperforms your expectations, would they sue? Are you allowed to cancel? Good questions. Locking in your merchants with lawsuits is very heavy handed.
Next up: “I’m from Groupon and I am here to sue you”. Groupon’s merchant contract used to say you can’t run a better deal within 60 days of running on Groupon. Now that there is real competition (Tippr, etc.), it says you can’t run ANY deal within 60 days of Groupon. Yesterday over at Tippr Boston, we featured a great local merchant. They ran a Groupon 58 days ago. 2 days to go. A lawyer from Groupon called and threatened to sue to recover all revenue paid to from Groupon during their last promotion. Did I mention it was only two days? Way to build merchant trust guys. Tippr of course does not have the exclusive language, only the “better deal” language. Tippr took down the offer as a service to our merchant, and are looking forward to featuring them again soon after Groupon’s lawyers cool off. Made me smile a little that Big Boy Groupon cares about little guy Tippr.
Frequent readers already read my Groupon API rant. Again, heavy handed “you must follow Groupon’s view of the world and can’t show my deals with anyone else’s” tactics. Developers are significantly limited in what they can do with the data. They are also restricted from showing Groupon deals along side any other deals (like all the aggregators are doing). That is basically putting yourself above the fray. Fine, you are the big dog you can do that. But don’t try to put on a happy friendly face and expect to get credit for being a good corporate citizen because you are not.
I appreciate Groupon’s trail blazing efforts to expand awareness about group buying. Keep executing your don’t play nice with others or merchants strategy. I think it is a winner.
Posted by Martin at 2:54 PM | Comments (1) | TrackBack
May 17, 2010
When is an API not an API?
Ok, I will say right up front that this is going to be somewhat of a rant. As my Twitter followers know, when I see a product crippled in obviously selfish ways (#ipadfail), it hits a particularly sore note with me. Over the weekend I found yet another such product.
Over @Tippr we are in the final stages of developing our API to allow third party developers to take our local deals and use them in their own applications. At a technical level, an API (Application Programming Interface) is simply a structured way for programs to communicate with standard information calls to receive standard structured data. Overlaying the technical details is the fundamental idea of openness and all the Web 2.0/3.0 “we are all in this together” love. When you say “my application has an API”, most people will give you props for being part of the love. When you tie lots of strings to that API, or cripple access to important parts of data, you have broken a core tenant of the implied API code. You have broken trust. Developers will figure this out. I don’t understand why companies provide API’s if they then cripple through the TOU the use of the API/data so much that it makes the API useless.
OK, now to the fun part, the guilty party (ack call the lawyers): Groupon. Check out some of the terms in their API Terms:
“You agree that you will not, and will not assist or enable others to:
- cache, record, pre-fetch, or otherwise store any portion of the Groupon Content, or attempt or provide a means to execute any “bulk download” operations;
- modify the Groupon Content, or use it to update or create your own database of business listing information;
- create or disclose metrics about, or perform any statistical analysis of, the API or Groupon Content;
- use the API on behalf of any third party;”
So what does this mean for a developer using the Groupon API?
1. Their application can’t do any caching which could include Groupon data. Caching is an important performance tool for every application I have ever developed. Having to fetch Groupon data on every page load could cause serious performance problems.
2. You may not store any Groupon content in a database of “business listing information”. Humm can’t store data I get from your API in a database, can’t cache it. Now what can I do with it?
3. You may not do any statistical analysis of the API or content retrieved therefrom. So I can’t say create an application which aggregates daily sales from Groupon across my state and shows trends? I can’t use New Relic to measure the response time of the API calls to Groupon’s servers. I can’t even use Google analytics to track the API calls. Back to the data, my application can’t do any statistical analysis of “Groupon Content” at all. Like say showing sales trends, pricing trends, category trends, geotag bucketing, category analysis, pretty much any kind of analysis which might add value to the “content” delivered through the API. So why is my application retrieving this data again?
4. A software developer may not use the API for their client. That would be “using the API on behalf of a third party.”
Well you say, there may be legitimate technical reasons for all the above legal gobblygook like Groupon wants you to always have the most up to date information and doesn’t want competitors scraping their site, and yes I can make a long list of excuses too. But wait, there’s more. Yes because Groupon is fundamentally all about building a consumer brand and protecting it, there is an additional little missive from their lawyers happily entitled “Groupon Branding Requirements”. I will have to admit this is the first time I have seen this level of hubris from any company. Just a few choice snippets.
“If you’re only going to recreate the functionality of Groupon’s own web site or mobile apps, save yourself the trouble and just put up a link.” Ah, now that’s how you motivate a developer community!
“Don’t aggregate our deals with other providers.” Humm but my application is actually trying to provide consumer value. A major way of doing that is compare/contrast and help navigate the various daily deal site data. Oh, but Groupon doesn’t want that level of scrutiny of their deals.
“Wherever you display our content, you must prominently display our logo.” I don’t have problem with credit, but the logo’s come with minimum sizes that are quite large and have specific color schemes that may not work with my application.
After reading all the documents and requirements around the Groupon API it is clear that they have take the “my data and brand is more important than your application” approach to their API. That is fine. Good luck with that.
Posted by Martin at 6:57 AM | Comments (1) | TrackBack