Is it Groupon vs LivingSocial or Barnes & Noble vs Amazon?

Groupon has captured a lot of headlines with its lofty valuation and screaming growth.  As the clear leader in the daily deal local couponing space, you expect it to be setting the stage for the industry as it did with its 50% off deal on $50 Gap gift certificates last summer.  The deal which eventually sold more than 400,000 and generated over $11 million in sales cemented Groupon’s lead.

Groupon takes a Commanding Lead Groupon Battles LivingSocial

According to Hitwise Intelligence, a year ago LivingSocial had about half of Groupon’s market share.  After closing the gap to within about 25% of Groupon’s share in June, usage tapered off to a startling degree while Groupon’s rocketed upward.  By December, Groupon had nearly a 10x lead in market share.  Then came the Amazon deal.

LivingSocial Closes the Gap

I was one of LivingSocial’s customers two weeks ago when I saw that I could get a free $10 for use on a site that I frequent.  Great deal.  I wasn’t alone.  Over 1.3 million other people seized the coupon netting over $13 million for LivingSocial making it the largest coupon deal recorded online.  Great story right?  Well, it’s actually just the beginning.

Where’s the Edge?

Amazon Joins with LivingSocial That single deal helped increase LivingSocial’s traffic by over 80% which brought the company’s share to within 50% of Groupon.  Hitwise Intelligence’s Bill Tancer nailed this analysis right away.  While LivingSocial’s traffic is expected to fall somewhat as the Amazon effect wanes, the big surge in orders and presumably new customers should have a lasting effect.  The economics of the deal aren’t clear and there is some inherent conflict between a site claiming to drive local offers to physical merchants doing such a big deal for a national online store, but the risk here was worth it.  The increased user list provides more potential customers for those local merchants going forward.  Expect some more deals like this as LivingSocial continues to try and close the Groupon gap.

Is Groupon the Copycat or Barnes & Noble?Banes and Noble Battles Amazon

Fast forward to Friday night.  I receive a special offer from Groupon.  It is a second daily deal that lasts all weekend.  You guessed it $10 for a $20 Barnes & Noble gift card.  The obvious idea is that Groupon didn’t want to appear to be missing out and it put together its own deal with an Amazon competitor.  But I doubt it.  The company missing out was Barnes & Noble.  Amazon is already the online Gorilla in B&N’s core market and it just juiced its activity with the LivingSocial deal.

I suspect it will come out that B&N was the instigator of the deal and not Groupon.  Does that mean Groupon received more favorable economics than LivingSocial on its Amazon deal?  Maybe.  With that said, the lackluster adoption of the deal, only 18,000 sold in the first twenty-four hours and won’t mean a big gain or loss on the deal for Groupon.  The big loser is really Barnes & Noble.  Its brand doesn’t carry the same cache as Amazon and no viral stampede as a result.

As a regular Amazon customer, that deal was a no-brainer for me.  It led to my first purchase on LivingSocial even though I signed up months ago.  Since I don’t already shop at Barnes & Noble online, I took a pass at this weekend’s Groupon deal.  A Free $10 is good, but there is friction associated with adopting a new online retailer that is not already in regular use.

Who do you think is the copycat here?  Comment below

Follow me on twitter:  @bretkinsella

2011
02/07
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Wolfram Alpha, Answers Beyond Search

Some people will remember the early days of search with Lycos and Altavista and the like.  They may also remember the entrance of Yahoo! and how it brought categorized search that made a still young web easier to navigate.  It was a real attempt to categorize the web.  The story of Google and its automated, user driven categorization and ranking of the web is well known.  It worked for many reasons, but the biggest was the scalability of the approach.  Oh…and its genius for generating cash.   But that is another story.

This past Friday was another milestone in web data access.  Stephen Wolfram, the Mathematica founder, Physics Prodigy and pioneer in Complex Systems Research helped the web take a big step forward with the launch of Wolfram|Alpha.  What is it?  Ask it a fact based question and it will mine computable knowledge available on the web and provide the answer.  You can compare the GDP of Germany and Poland and it will provide the data in a line graph and trend line over time.  You would like to know the population of Laos compared to Vietnam.  Same thing.  Graphs, charts, other useful information is displayed.  How many weeks have passed since February 1969, a quick calculation.  The answer to differential equations.  It’s there.  I wish I had this back in school.  

Don’t get too excited.  It won’t answer subjective questions.  It is designed to provide factual information.  But what it provides is so much better than a search which returns links to documents.  Nova Spivak refers to Wolfram|Alpha as an “answer engine” and not a search engine.  As he says, it’s not a Google killer, it’s a new category altogether.  It doesn’t simply retrieve data or answer questions, W|A actually compiles fact-based data and presents it to the user in multiple formats including graphs, charts and tables.   Spivak’s articles on the topic are in-depth and thoughtful.  Check out one here: http://www.twine.com/item/122mz8lz9-4c/wolfram-alpha-is-coming-and-it-could-be-as-important-as-google

When you create a new subcategory of a well known space such as search engines, you are clearly acting with edge.  And if you spend a few minutes with W|A you will surely see an edge to it.  The use of social media as part of the otherwise quiet launch was a nice touch, but we clearly have an innovator here that is better at the product than the marketing.   Big launch or not, W|A is compelling.  Check it out at http://www.wolframalpha.com/index.html.  

Steven Wolfram is a pioneer, but to date his celebrity has been mostly limited to an exclusive group of the math and physics communities.  Wolfram|Alpha is moving him to the mainstream.   Oh, one more point.  Another new category of web search with an edge will hit the street later this year.  I look forward to letting you in on that as well.

AwE

2009
05/20
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Barking Up a Dead Horse

I had the opportunity last week to participate in a presentation by Tom Batchelder, author of Barking Up a Dead Horse, Avoiding Wasted Time and Effort in Business-to-Business Sales. The mixed metaphor alone probably merits a mention in the AwE Blog, but it is the philosophy that caught my attention.

Tom does a nice job laying out how you can act with edge – go against the grain – and be successful. In fact, he explains how it enables you to be more successful. My goal here is not to promote yet another “new sales methodology.” However, when you see  a chapter titled, Your Ego Costs you Time and Money, you know there’s a gem in there.

Here is the basic premise.  Most people waste their own time and that of their sales victims by positioning themselves in one-down positions.  He describes this little “v” big “V”  or v | V.  The little v is you and the big V is the customer.  This creates a power dynamic that belittles the contribution you are making in the conversation.  The one-down is you and your little v.  Presumably you have some value to offer the client (e.g. deliver lower cost, better performance, unique insight) or they wouldn’t be meeting with you.  They may want to learn, get help with a tough problem or fill a gap.  Despite this fact, people often betray their own value by obsequiously pandering to potential clients.  Thus, they are one-down.  

If you are not providing value, your little v suggests that you can save everyone a lot of time by engaging elsewhere. Tom’s most interesting observations are about how easily we put ourselves into one-down positions when it is completely unnecessary.  We are overly polite and use phrases like, “thank you so much for taking time out of your busy schedule to meet with me,” as if we have nothing to offer in the conversation and are so lucky to be granted an audience.  The point is not to avoid politeness or be completely unaccomodating.  It is rather that you need to act and communicate with a big V approach so you can create a V | V dynamic.  If not, you waste the time and money of  both parties.  Not exactly a win-win situation.

This theory cuts against the grain of the “customer is king” and “customer always right” mentality.  It takes a little courage to assert yourself in a sales cycle and to walk away if it is not a good fit.  It is revolutionary to some that you can go in with the perspective that you have value to offer and still avoid coming across as condescending or abrasive.  That is a nice characteristic of  Tom’s personnal style.  He embraces a philosophy of  acting with edge, but does so with a curiousity and interest that makes him a good conversationalist and not the least bit overbearing.   He is self-assured without coming off as cocky.  That is a good lesson for people that acting with edge can come in many different flavors.  

I hope you can avoid wasting time barking up dead horses by getting a little edge in your style.  

AwE

2009
04/22
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Act with Edge: a mission

Too many organizations and people seem to be satisfied with mediocrity – follow the pack – don’t take too many chances – the risks are too high. Other people seem to focus on the big splash that draws attention but is more like blunt force trauma that leaves the audience dazed and confused.

There is another way. The Act with Edge mission is to help companies and people better understand how to stand-out, be relevant and be effective at the same time.

Act is the reminder that nothing happens without action. The Edge is all about being sharp, penetrating and making a meaningful impact that leaves you better options than when you started and establishes a platform to build upon.

This blog will provide examples, risks, rewards and recommendations. In the meantime, I welcome questions about what you would like to see and examples of how you have acted with edge or seen others do it – and how it turned out.

AwE

2009
04/02
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