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Welcome! I'm sharing and developing ideas about business, politics, and government. I would love you're feedback - please comment with your thoughts, questions, or suggestions - It will really help my thinking and writing get better, and our ideas might come together in exciting and unexpected ways. If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting! Groupon is wildly successful, a market leader, generating incredible growth, revenue, attention, and market valuations. However, Groupon’s founders and executives shouldn’t be sleeping well at night. Look no further than the Flip: in two years, they became massively succesful and dominated their category. Two years later, flip was scrapped because the whole category was dead.
Groupon went live in 2009, and in about a year, created and dominated the daily deal market, garnering all the attention afforded a beauty pageant winner and sky high valuations. But with success, comes copycats, and while imitation is flaterring, its not profitable. Success in the category will depend on giving the best deal to companies. That means balancing what you charge (your cut of the deal, or 50% of the sale price at Groupon) with how many people you can get to buy.
Groupon has three big assets: it’s email list (~roughly 60 million subscribers), it’s sales force recruiting businesses (unknown, but likely far and away the largest in the space), and it’s brand (“groupon” is to daily deals what “google” is to search). But the storm cloud is on the horizon. Sites like livingsocial, facebook, google, are players on the national level, and a bevy of competitors are entering the market with a niche focus or with a mobile/location based twist. That doesn’t even include sites like yipit, which aggregates all of those other sites into one place to simplify your search or simply send you less emails.
Continue reading Groupon’s Worst Nightmare
The internet has been abuzz about the NYT’s new pay wall. Basically, after reading 20 articles in a month, you need to pay for a subscription to keep on reading. But there is one big exception: You can read 5 articles a day from Google searches and an unlimited number of articles from social media, blog, and news outlet links. This exception seems like a smart loophole to put in so that good content can be widely read, but it may be the lynchpin of the entire strategy.
Say you write an entertainment blog and post 1 original article every day and 3 interesting links. You get a lot of readers who come to you for your interesting writing style and insightful take on events in entertainment, and because you comb through a lot of different news media to find interesting stories/articles other people wrote for your readers to read.
To find 3 really good articles to share every day, you need to read 15 articles a day (this is probably a low estimate). Some of those articles will help come up with a topic for your original article and educate you enough to write about it, but say you need to find 5 older articles for background material. So you need to read ~600 articles a month total.
Continue reading Not Just A Pay Wall
 The interactive chart featured here is making the rounds on the web, because it tells a story about how the rich are getting richer and the poor are getting poorer, or it at least it seems to.
The problem with that interpretation is that it is about income, not wealth. Each year, the people in the top 10% of earners can change. For instance, in the 1970′s Cher was in the top 1% Today, Lady Gaga is instead. So instead of the rich getting richer, we are actually seeing the highest paid each year gettting paid increasingly more than the average.
The right message to take away is that over time, our economy has changed to be more winner take all, which makes sense. In a knowledge economy, the best at something can get rididculous pay and the rest get near average, because the work of the best can easily be reproduced and extended to most everyone, reducing the need for anything but the best and concentrating a large markets worth of payments in fewer hands.
Continue reading Good Time to Be Great
The mainstream media is starting to spread the narrative about rising income inequality in America:
[In 1915]King was somewhat troubled to find that the richest 1 percent possessed about 15 percent of the nation’s income. (A more authoritative subsequent calculation puts the figure slightly higher, at about 18 percent.) This was the era in which the accumulated wealth of America’s richest families—the Rockefellers, the Vanderbilts, the Carnegies—helped prompt creation of the modern income tax, lest disparities in wealth turn the United States into a European-style aristocracy. The socialist movement was at its historic peak, a wave of anarchist bombings was terrorizing the nation’s industrialists, and President Woodrow Wilson’s attorney general, Alexander Palmer, would soon stage brutal raids on radicals of every stripe. In American history, there has never been a time when class warfare seemed more imminent… Today, the richest 1 percent account for 24 percent of the nation’s income.
Via Introducing the Great Divergence
Continue reading Battle of the Bulging Middle Class
CBO’s bottom line is thus simple: tax revenues will rise faster than the economy even if Congress does nothing new. Indeed, revenues may rise faster than the economy even if Congress enacts substantial tax cuts. Our long-run fiscal dilemma exists because the scheduled growth in future spending is even larger than the scheduled growth in future revenues.
via Why Taxes Are Going Up « Donald Marron [emphasis added].
The problem isn’t raising more or spending less, it’s doing enough of both and living within our means. People says deficits don’t matter, but at some inestimable point, they do. It’s systemically safer to live within our means (bring our deficit spending and debt closer to zero,) than to approach that catastrophic, unknown number somewhere north of where we are now.
The most talked about issue of the year, it’s been dissected more than the captured alien in Independance Day – it’s gotten to the point where you don’t want to hear more about it but can’t stand to not talk about it. I’m by no means a basketball expert, but I think I know enough to place a bet: Sorry Ohio, Lebron is gone.
Lebron might be the best basketball player in the NBA – but he and his team are definitely the best sports PR people in the world. They want to grow his name till its bigger than his game, and they carefully cultivate how he appears in public.
“LeBron is not going on a tour. He never planned to go on a tour and has not been a part of any team’s plans for a recruiting trip.” – Maverick Carter (James’s Friend/Bussiness Partner)
Continue reading Place Your Bets: Lebron is Leaving
From an article about AT&T’s new pricing policy, with a bunch of comments about moving to Verizon for their unlimited data plan:
Verizon, the largest U.S. wireless carrier, declined to comment on whether it will scrap its advertised unlimited plan, which carries extra charges if customers use more than 5 gigabytes of data a month.
via AT&T Sparks User Backlash With End to Unlimited Plans Update1 – Bloomberg.com. [Emphasis added]
Did the definition of unlimited? When did unlimited begin to mean that the limit is 5 gigabytes?
Continue reading Redefining Success
Absolutely amazing:
The scientists had volunteers move a cursor horizontally across a screen by pinching a device called a force transducer between thumb and index finger. The harder each subject squeezed, the faster the cursor moved. Each player was asked to move the cursor back and forth between a series of targets, trying to travel the course as quickly as possible without overshooting. The group trained 45 minutes a day for five days. By the end of training, the players were making far fewer errors.
The scientists also trained another group of people on the same game, but with a twist. They put a battery on top of the head of each subject, sending a small current through the surface of the brain toward a group of neurons in the primary motor cortex. The electric stimulation allowed people to learn the game better. By the end of five days of training, the battery-enhanced players could move the cursor faster and make fewer errors than the control group.
And the advantage was not fleeting. For three months Krakauer and Celnik had their subjects come back into the lab from time to time to show off their game-playing skills. Everyone got rusty over time, but at the end of the period, the people who had gotten the electrode boost remained superior to the others.
Continue reading Steroids for Your Brain
The internet has opened a torrent of information sources to us. Over the course of the week I read selected articles from several newspapers, pipe posts form about 50 different blogs on topics ranging form finance to marketing, to what my friends did last week , not to mention all the linking and Wikipedia reading that comes from all that reading. That said, this past week I’ve gotten worried that despite all the seeming diversity of sources I get news and analysis from, I”ve just built the illusion of depth, a house of mirrors where I see a thousand versions of my own interests and thoughts refelcted back at me over the web.
This past week three things happened in the world: Continue reading See (Only) What You Want to See
Matt Taibbi has another entertaining and informative article on financial reform:
The Sanders amendment, if it survives in conference, will lead to some delicious disclosures. Almost exactly a year ago, Sanders questioned Bernanke at a Senate-budget hearing, asking him to NAME the banks that had been bailed out by the Fed. Will you tell the American people to whom you lent 2.2 trillion of their dollars? Sanders demanded. After a little hemming and hawing, a bored-looking Bernanke – Time magazine s 2009 Person of the Year, by the way – bluntly said, No. It would be counterproductive, he explained, if clients and investors learned that these poor banks were broke enough to need a public handout. Bernanke s performance that day so rankled Sanders that he wrote up his amendment specifically to bring the Fed s goblin-in-chief to heel. The new law will force Bernanke to post the identity of loan recipients on the Fed s website for all to see.
via Politics – Latest News – Wall Street s War – RollingStone.com. [Emphasis added]
This isn’t the language of someone trying to make things better, it’s the language of an internet troll looking for cheap thrills. The only problem is, as satisfying as it would be to see all those “crooks”, “goblins”, and “vampire squids” squirm, it’ll hurt us more than it hurts them; the executives responsible already have years of paychecks, vacation homes, yachts, and whatever else tickled their fancy.
Continue reading Shooting Ourselves in the Foot
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