Depressing thoughts on Groupon’s model. (Editor’s note: Jeff Bussgang is a General Partner at Flybridge Capital Partners. This column originally appeared on his blog Seeing Both Sides.) You probably read a lot last year about Groupon’s rejection of a supposed $6 billion offer from Google. Most of the reports breathlessly described the explosive revenue and customer growth the company has achieved in two short years and what a breakthrough the model.With over 40 million email subscribers, Groupon’s success is based on consumers responding to their daily deal emails, and sourcing high-quality offers that compel readers to respond.
The story CEO and founder Andrew Mason told in his recent interview with Charlie Rose was that when they offered helicopter flying lessons in one of their daily email blasts, they sold 2,500 in one day. But haven’t we seen this movie before in the world of direct marketing? For example, when display advertising was innovative in the late-1990s (remember websites without ads?) Registered Patent Agent - Robert M. Hunter on Patents. Startupwiki. Business Model for Startups. Report: Companies Should Organize For Social Media in a “Hub and Spoke” model. I often get asked by brands: “How should we organize our company for social media?” Or “Which roles do we need”, or “Which department is in charge”. So for our latest report (clients can access all the details) answers just that, it has data and graphs about spending, brand maturity in the social space, which department ‘owns’ the program, and how companies are organizing.
Companies organize in three distinct models For this post, let’s focus in on how companies are organizing. There are three basic models that I’ve observed and surveyed brands: The Tire (Distributed): Where each business unit or group may create its own social media programs without a centralized approach. The above graphic shows how brands we surveyed are organized Which way should companies organize?
Remember: 80% is Strategy only 20% is Technology On a related note, thanks to heavy collaboration with colleague Zach Hofer-Shall we’ve also published a report for clients on a community launch checklist.