Friday night, Jeff Holden, Groupon SVP of Product Development Shared the Groupon vision for the world’s Commerce Operating System. The strategy is so much more than daily deals, extending into yield management for merchants, a platform for loyalty and retention to reward buyers and increase B2C stickiness, and of course, massive customer-centric experience capabilities around consumer’s social graph.
Vision for a Groupon Global Commerce Operating System
Jeff shared concepts and direction for how near field communications (NFC) and other mobility identification features will enable consumers to increase choice, reduce cost, and increase satisfaction through user-centric and self-directed decisions based on perfect market information. Through the two economic levers of discovery and price, consumers and merchants will be able to match each other’s needs to mutual benefit. Jeff also shared how Groupon’s focus is to satisfy merchant’s fundamental marketing needs: 1) to attract customers, 2) optimize business yield over time, and 3) retain customers through rewards, user-customized offers and premium deals.
To put it mildly, the energy in the room from Jeff’s style and presentation content was so high; he crammed, stuffed, crow-barred more than I could take notes on in the time available before the next point. I thought I was a 12 on the 1 to 10 scale of passion/energy/talk scale, but Jeff puts me to shame, somewhere 2X off the chart. Jeff shared more about the world’s commerce operating system, in terms of how it leveraged the markets, built satisfaction out of real-time, location-based and ever-increasingly perfect information. He predicted how this was going to change business, supply chains, and more. I couldn’t get it all down. Suffice it to say, Groupon is fundamentally a market-driving company. Groupon is most certainly not a market-driven company, following the market! I suspect that the changes we will all experience will come sooner, rather than later.
9 Points of Wisdom for Entrepreneurs
The majority of Jeff’s talk focused on words of wisdom for entrepreneurs and innovators that he learned while at Amazon.com and Pelago; two companies he worked prior to Groupon. The room was full for the ILLINOIS Executive MBA Innovative Leadership Speaker Series event at the University of Illinois downtown Chicago campus location.
Minimize Regret – Typically, this means regret of omission, Jeff shared. Rarely do you find someone saying I regret taking a path, learning or doing something. When given the opportunity, take it, don’t hesitate, jump in and go. Doing so carries you forward, and tempers your spirit for the next opportunity. Build a habit of taking risk and capitalizing on opportunity, and you will minimize regret.
Be Frugal – Nothing for a startup or entrepreneur is as important as being frugal. This mindset ensures so much, whether a bootstrapping team who needs to eat, or if you are managing $2 million of a venture capitalist’s money. The less you spend on getting traction (see the next item), the longer your out-of-cash curve can last and the more you will benefit in the long run.
Get Traction FAST – The single most important metric for any startup or entrepreneur is to get customers. There’s no such thing as beta, it’s your R1. Get customers on board, added to your database, using the minimum viable product and rapidly develop additional features to retain and respond to those early (adopter) customers. The company that develops the perfect product, then launches, is the company that loses. Launch early, release updates often. Traction also is the metric that investors will value the most. Traction helps you retain the greatest ownership/control/equity in the company, and as well, attracts the best talent.
Be Bold – Jeff shared that it’s easy to do the daily deal that is why there are competitors doing that. But, for success, you must be bold, do the messy stuff that no one else will think of. It’s the messy, complex, and difficult innovation challenges that set the course of your strategy and ultimately differentiate you from your competition. Startup strategy, in order, 1) assemble the easy stuff, 2) take the lead, 3) sell and get traction, 4) boldly innovate and 5) extend your lead. Repeat steps 3, 4, and 5, aggressively.
Optimize for the Long Term – This is Jeff’s word of wisdom around failure innovation. As a start-up or growing company is being bold, they must continuously plant seeds for the future, ideas that must be tried of which 80% may fail. It is the 20% that extends the lead. Internal culture must allow and reward failure in order to optimize for the long term. There is no room for negative antibodies in a company’s culture, or as Jeff puts it: “you must overcome institutional no” as a response to ideas.
The Press is in the Entertainment Business – Jeff had some great stories on this around Amazon, Bezos, and his experience there; but, energy spent worrying about what the press is saying about you, is energy lost and misdirected from doing what you say you are going to do – generally proving the press wrong, and doing it sooner. Jeff did mention that it’s imperative that leadership be transparent with the organization. To build trust, employees must never learn from the press what they should have learned from their leaders. This factor of culture separates mediocre from really great companies.
Obsess Over Customers, Not Competitors – In the world of the internet, we are approaching perfect information. Never has there been so much information available to consumers and companies. If you follow your competitors, you are not a leader and you are not following your own unique differentiating strategy. Worse, you are not focused on the specific needs of your customers – which invites them to leave for a better experience with another company. Focus on what they want, need, and tell you – then give it to them. Leave the competitors behind.
Surround Yourself with People Who Make You Feel Stupid – This is another of the fundamental truths that even a sixth grader can identify in an organization. So often CEO’s (startups and all-sized companies) think they have to be the origin of every good idea, or be in control of every decision. The best leaders hire people that are smarter than they are, and relish in getting out of their way. It’s the shortest path to success. A sixth grader can identify leaders that have this quality, and those that don’t. Jeff suggested the concept of “bar raisers;” people that are involved in pushing the limits of new hires, existing contributors, and such to force this concept.
No Whining – Jeff closed with the obvious. The first 8 of these points of wisdom are critical, of course. If you have whining, the negative effect means one of the other eight are out of check. However, don’t always shoot the messenger! What you might think is whining, could be one person being bold and bringing something to your attention like a new idea, an innovation, or opportunity to be more bold, frugal or aggressive. Evaluate whining carefully – it might be the voice in your ear telling you how to minimize regret.
Epilogue
The hour long talk ran over – the energy and interest in sharing from Jeff was overwhelming. The audience was riveted, and wanted more. In my post today, I’ve provided you with my interpretation of the great learning possible from Jeff’s points of wisdom. I’m sure another interpretation exists, but this one shares the main points.
One thing is for sure. Groupon is using these points of wisdom to extend their lead. Daily Deals are the easy stuff. The really interesting and messy stuff that will bring customer delight is just on the horizon.
