Here is part 2 of my day at last Friday”s GROW2010 Conference
Andrew Mason – Founder and CEO of Groupon.com
Just as the room was about to take a 15 minute break, in walked Andrew Mason (the incredible successful founder of Groupon). What is Groupon?
- Groupon is all about group buying
- 1 local deal is offered to email subscribers on a daily basis
- If a certain amount of customers commit to purchasing the Groupon, then the deal tips and becomes available to everyone who has committed
- Merchants only pay for play and are introduced to traffic that they might otherwise have never seen
- Just how successful has Groupon been in its infancy
- Forbes magazine just named Groupon ‘The Fastest Growing Company Ever’
- At just 17 months old this April Groupon boasted a $1.35 billion valuation when it raised $135 million
- Groupon is the second fastest company to reach $1 billion valuation, right after YouTube (now part of Google)
- Groupon broke into the black just seven months after inception
Mason had just flown in from New York (where he had appeared on NBC’s Today Show that morning). He was also held up at customs. Maybe they were checking to see how much GAP merchandise he was bringing into the country… Why? Because Groupon launched its first national deal the day earlier, partnering with Gap to offer $50 worth of apparel and accessories at the low price of $25. By day’s end, 441,000 Groupons were sold, bringing in a little more than $11 million.
Interviewed by Wall Street Journal’s Kara Swisher, Andrew told the story of how Groupon came to be. It didn’t start as a business. It originally started as a social site (The Points) where people could use their collective social power to do something larger that a single person could ever accomplish. It was all about social change. The group buying thing had been tried before (Mercata) but Mason and his team realized it and brought it to its forefront once social media was involved.
Wanna hear more?
- Groupon receives over 700 incoming requests per day
- They only accept 1 in 7 requests
- In May, Groupon sold 6,561 tickets to a King Tut exhibit in New York”s Times Square for $18 a piece, little more than half the list price (the deal brought in $120,000 at virtually no marginal cost to the exhibit). Why am I telling you this as an advertiser?
- The most popular item so far (aside from the GAP deal): a $25 ticket for a Chicago architectural boat tour sold for $12. In May Groupon moved 19,822 tickets in eight hours and split the $238,000 with the tour operator.
- According to Mason, the least popular Groupon was karate lessons
- Groupon’s goal is to enable e-commerce for every local business out there.
Key Quote: “Every empty restaurant chair, every empty spa table, is an opportunity.”
Panel – The Business of Monetizing Fun
- Dave McClure, 500 Startups
- Robert Goldberg, SVP of Corporate Development, Zynga
- Jason Bailey, GM of Virtual Currencies, Adknowledge
The heavy hitters in the social gaming world were up next to discuss the health of the industry, and where it is going. Wow! I had no idea. Jason Bailey kicked off the discussion by sharing that the average social gamer is spending $10 – $20 on social gaming per year. And that more and more, social gaming’s virtual goods are going to be making their way into traditional businesses. Much like we are seeing with Foursquare, companies will create an engaging game around traditional activities. For example, Top Guest rewards you with loyalty points for checking into their hotel locations that can be redeemed for future lodging. But the most important thing that I learned from their discussion came from Robert from Zynga (who’s company, the day before, allowed Snoop Dog to blow up an armored truck in the Las Vegas desert to announce the release of Mafia Wars Las Vegas). He said that “we are monetizing a social experience. The growth/usage patterns are about communications and the gaming is just a substrate to communications.”
Key Quote: “People are not looking for production value in a social game. They are looking for interaction with their friends.”
Panel – What App Developers Should be Thinking About
The discussion leader was Chris Albinson of Panorama Capital, joined by Paul Bernard of Nokia, Wesley Chan of Google Ventures, and Tyler Lessard of RIM. This lead to a heavy final presentation. They were also joined by a “salesman” from Microsoft. Or at least it came across that way…
It was a bit of a “my dad can beat up your dad” back and forth throughout the entire session. However, the most interesting part ended up being a slideshow demonstrating the tremendous growth of the Web, from 1.0 to 2.0 and to 3.0, which Chris says started 29 months ago, and that by 2014, 3.6 billion users will be connected to the web (we”re at 1.6 billion currently).
Key Quote: “The power of the user experience is what changed everything.”