I saw a very interesting article in the WSJ weekend addition that I was perusing between kid chaos, pancake batter being thrown to the four corners of our kitchen and learning of the latest technical difficulty via my four year old who was unable to access her favorite Barbie video on our Apple TV.
The article immediately captured my attention with its headline. “Researchers Bet Casino Data Can Identify Gambling Addicts“. Ever since the beginning of my formal career I’ve been an ardent fan of data and in particular the power that this data holds to drive a more precise enterprise outcome or provide fuel to the attainment of a business goal. In the last two to three years we’ve seen the landscape of data and analytics raised to its rightful place in many business leaders minds. What is particularly exciting about this article is that during graduate school I remember sitting through a captivating discussion from a Teradata executive detailing a case study involving the roll out of a unique analytics solution for a large publicly-traded casino entity. In this solution, Teradata was helping this particular casino operator to visualize all manner of interesting characteristics in its business in near real time. One visualization example that was presented was a heat-map that showed the level of play in a variety of slot machines over a 24 hour period. In this quick example, the executive showed how the casino operator was able to look at frequency of play and then re-arrange machines, time-tables of drink servers, and other parameters to try and increase play in dormant areas.
Jump forward several years later and you now see that same industry taking the same affinity data that was used to feed loyalty programs and reward programs being used in a different, but equally useful manner. In some ways, this comprehensive approach to the utilization of data in an enterprise is the holy grail or pinnacle of what good data systems and design should illicit. The capability for data to be used both as a profit generator and serve an altruistic role in identifying challenges of certain players from a gambling perspective.
What are your thoughts? Can an organization use this data well in both ways (for profit & altruistically)? Is there an obligation of organizations where applicable to use there enterprise data to serve the public good if they can?
So this may be admittedly old news, and I also am willing to acknowledge that looking in the rear view mirror is a luxury entrepreneurs don’t have… that being said, WTF Groupon?
Here is the quick timeline: (1) Groupon sees interesting opportunity to take what effectively amounts to a coupon book online to the masses, (2) Groupon is first mover and grabs headlines and market share, (3) Big Gorilla (aka Google) sees success and wants in, (4) $6 Billion dollar offer to Groupon and it is denied, (5) Groupon goes public and now is in fierce competition with lots of other “johnny-come-latelies” in market that is getting saturated with price pressures & margins are quickly eroding.
I could ruminate on this to great length but I think I’ll keep it simple and to the point. Here are the items that I’ve learned from this unfolding drama between Groupon and Google from an entrepreneurship perspective:
(1) Recognize Luck vs. Skill – Not trying to incite a riot here but let’s be honest, Groupon is a local advertising / coupon book taken to the web. They did awesome with it and executed flawlessly. My point with this one is that sometimes right time, right place and the synchronicity of all the variables coming together needs to be acknowledged and appreciated and taken advantage of.
(2) Be Mindful of the Market – I think most persons if they project out could have realized the business model of Groupon is one that is damn hard to defend against. The technology is widely available, the secret sauce of sales is their massive sales team and copy writers. As we see today everybody is in the local coupon space. Being mindful of the market and realistic about the business you’ve created (see point #1) are key.
(3) Think Worst Case – 1000 scenarios could have manifested post Google offer presentation. However, the worst case scenario was that Groupon turned down the money and saw their healthy lead in the marketplace becoming infiltrated with wanna-be’s and others who may have been equally cash rich. Jump til’ today – guess what happened?…. it’s a straight out bare fisted, gang fight in this market that Groupon competes in. In an alternative scenario, upon acceptance of the $6 Billion clams that Google was offering here is what would have happened – (a) Groupon team got handsomely rewarded for 2 years of effort, (b) They got a buyout company with deep pockets and already massive leverage / data and reach into local markets, (c) They transferred the market risk to the buyout entity. I like the latter a bit better.
(4) Recycle and Innovate. What do entrepreneurs love? In my opinion, they love the thrill of the hunt, creating something from nothing, and absolutely loving what they do. Maybe Andrew Mason so loved Groupon that upon the $6 Billion offer from Google he decided his love child was better off going it along. I’m not sure. One thing I can say is that for me – continually innovating is my passion. At a $6 Billion buyout offer from Google, Groupon and the guys that created and made it successful could have a hell of a lot of passion to continue their entrepreneurial pursuits.
So in the short analysis, I think this was a bone headed decision. I sure as hell hope it wasn’t motivated by greed and the belief that if Google would pay $6 Billion then surely we must be worth $10 …. sadly, however, I do believe there was a bit of dollar / valuation chasing taking place on this one. In the end, no one but the team will know whether they made the right decision – but for me, in the lens of the rear view I certainly have learned some valuable lessons from what they did. So for that Groupon, thank you….and no I won’t be making any buyout offers any time soon.
The Christmas tree was gone, the wreaths were put away, and the assorted knick-knacks that make their yearly pilgrimage to my living room were back gathering dust in the attic. What to do now?
Well of course I had to set up my Christmas gift, the Apple TV. As I began opening the box I was amazed at the quality of packaging and presentation that occurs with every Apple product I purchase. Each product has a symmetry and precision to it that is both remarkable and exciting.
As I was opening and taking apart power cords and reading through instructions it made me think of how nice it is to receive a high performing product and to also receive it in a well thought out presentation. I know many times in my business activities, (I’ve been guilty as well), there is a great deal of time spent on the quality of the output but little effort spent on the packaging or overall presentation. It’s analogous to shelling out $10,000 for a beautiful, precise time instrument (i.e. Rolex) for your best friend and then putting it in a brown-paper bag with a bow on top. How many times, particularly, in the professional services industry do we work day and night on a white-paper, strategic assessment, or new version of software and then the big-day, the day of presentation arrives, and the “wrapper” for that product / service is an after thought?
With Apple, do to the quality of their presentation plus the product itself I’ve developed a dual affinity. This dual affinity is centered in confidence that the product will work as specified but also in the excitement of how I will receive and “discover” that product. This discovery process is putting your best foot forward and is the opportunity to WOW them.
In business, most any company or individual service provider could take notes from Apple regarding how to expertly present a product. What are your thoughts? Do you have experience with good and or bad packaging and the impact on your overall experience?
So yesterday, my oldest and I headed out to our formal rocket launching site…similar to Johnson Space Center but without the high overheads and government bureaucracy. In attendance for the formal launching of our awesome space craft courtesy of Estes Rocket Building Kitwere none other than the esteemed Princess Cinderella, Sleeping Beauty and My Little Pony (Ms. Sparkles…?). Also on hand was another VIP guest named Ms. Chloe, although my daughter pronounces it Ms. Glowey. In the video footage you hear my daughter saying…”Now Ms. Glowey you need to be very brave.” With firm words of encouragement that would make even Gene Kranz proud we did a final adjustement for wind direction, speed and began our countdown.
The video is only a little over 1 minute in duration but pretty cool and was a neat way to spend a couple hours on a Sunday!
Okay so I have seen my fair share of Die Hard-esque, conspiracy laden action movies and would like to think of myself as a generally level headed individual. Seriously, who could really believe that some Internet savvy, greedy, terrorist organization could take control of an entire US network infrastructure and cause wide spread pandemonium like what happens in Die Hard 4. Even better, what about the James Bond movie, Tomorrow Never Dies, where a crazy media mogul tries to start a war by leveraging his global media empire combined with the basic vulnerability of a absurdly naive viewing audience. The movie Tomorrow Never Dies was filmed in 1997 and since then we have experienced the rise of Google, heightened popularity of social media platforms, and a general ability to be plugged in and reporting from almost anywhere.
It is in this new modern day, “always-on” society that I wonder: Have we created such a highly integrated, Internet driven society that our basic vulnerabilities are significantly higher today than they might have been even five years ago? (i.e. Are the plot lines of these two movies referenced above really that far out of line?)
Case in point, in 2008 there were 2 occurrences that received moderate news coverage but had a more significant impact than what the standard news media portrayed. Both occurrences involved misinformation and big swings in the public stock prices of two very large companies. The bigger issue behind both of these stories was the fact that because of the interconnectedness of our modern day world, the misinformation spread quickly and caused downstream affects that were extremely significant. The two publicly traded companies affected in these two instances were Google (GOOG) and United Airlines (UAUA).
The United Airlines scenario is particularly intriguing. Over the weekend of September 6, 2008 (Saturday) an article was posted to the South Florida Sun Sentinel website that indicated United Airlines was filing for bankruptcy. The shocking article was actually true with just one problem. The actual bankruptcy filing of United Airlines had occurred approximately six years prior in 2002. Here is the interesting part, through the wonders of the Web, website visitors began clicking on the article in heavy volumes while visiting the newspaper’s website. This caused the article to grow in popularity and actual be featured on a most popular article section of the website. This in turn caused Google’s news reader bots to recognize the significance of the article and index it within the Google news ecosystem. One search later by an investment advisory / news shop in South Florida and a subsequent Bloomberg update and Voila!, massive sell-off of United Airlines on Monday, September 8th, 2009. How massive? Below is the trading activity from September 2, 2008 to September 10, 2008. On the panicked Monday sell-off, United Airlines (UAUA) traded in volumes that were nearly triple from the previous Friday. More importantly, the stock which had closed at $12.30 a share on Friday reached a intra-day low on Monday of $3.00. The delta of $9.30 a share represented the evaporation of $1.4 Billion, Yes that’s BILLION. Obviously, the move downward on Monday was countered when investors realized the story was old and not relevant. The thing I find most poignant about this scenario is that it shows both the fragility and strength of our networked society.
The point is simply a recognition on my part that :
(A) we are more connected and that creates awesome opportunities and also more risks
(B) this interconnectedness could be used by greedy criminals (you know the Die Hard 4 kind) to manipulate markets and momentarily guide opinion and therefore behavior
(C) within this environment we need to craft governmental legislation that will ensure we all are allowed to benefit from the good but limit our downside risk.
In short, I love technology, the Internet and sometimes these social apps. Well sometimes not the social apps, especially when a semi-friend from high school updates me on the fact that they are folding laundry with Tommy. Either way, it is clear to me that some of these far-fetched plots of Tinsel town could potentially be more viable as we continue to migrate ourselves, our businesses further into the Internet as evidenced by 2 incidents in 2008 (GOOG & UAUA).