
Groupon’s Success Disaster - GlennKelman
http://blog.redfin.com/blog/2010/09/groupons_success_disaster.html
======
danilocampos
I see three immediate problems:

1\. The merchant didn't think through the consequences of their promotion.
They made a deal that was too appealing to an unnecessarily broad swath of
potential customers. A commenter on the blog points out that the better
approach is to figure out how to bait the hook for a specific type of
desirable customer instead of having a fire sale.

2\. Groupon didn't look out for their partner merchant. Groupon's job is to be
really _smart_ about the business they're in and to share those smarts with
their partners. Sure, they're relatively new at this too, but a part of their
sales process should be qualifying the deals they're going to be running for
people and saying "hey, you know, this might be giving away the farm."

3\. People are dicks; doubly so in a down economy.

~~~
Marticus
Plain and simple: She should have driven a harder bargain or not gone for it.

Also #3, #3, #3, and #3. People don't read the little bit on Groupon where it
says "tip like you're not getting a discount," or just ignore it, and also #3.

~~~
jaxn
Groupons terms are not really negotiable.

They offered me the same terms when I called them about my retail stores.
(want min 50% off for consumer, they take 50% of revenue). I told them it was
too rich. They wouldn't budge. I walked away.

They have a 6 month waiting list in some areas, why would they negotiate.

I am amazed that so many businesses accept these terms. There is just no way
it makes sense.

------
brm
Making a poor business decision and then somehow blaming Groupon for it is no
better than building a house in a flood plain and not having flood insurance.

Groupon works wonderfully for businesses with predictable fixed costs and
decreasing marginal costs - bowling alleys, stadiums, art museums etc... It
does not work well at all for businesses who need to source product, prepare
goods, or provide service - restaurants especially

~~~
potatolicious
> _"It’s because we cannot afford to lose any more money on this terrible
> decision I made"_

Quote from the end of blog post. Having read through the whole thing I do not
believe at any point she blamed Groupon for her predicament - she walked into
it eyes wide open and appears to acknowledge this.

It does, however, raise interesting questions about Groupon's relevance to the
small businesses they purport to help. Groupon is supposed to be a win-win for
consumers and small businesses alike, but it would appear this may not be the
case. Seeing as how this is core to their business model, if this is a regular
case I would expect this to sink Groupon sooner or later.

~~~
anigbrowl
Sounds quite similar to the problems people have reported with Yelp in some
ways. Stories like poison the well for anyone trying to sell net services to
small businesses later on, too, even if the deal is much better value. I
gather a lot of cafe owners are done with the free wifi too.

------
reitzensteinm
The numbers do not add up. Assuming 1,000 customers;

$8,000 in losses is an $8 loss per customer. With $3 of revenue. So they're
claiming $11 in variable costs to service each customer, for $13 worth of
product. No way that is correct - if it is, Groupon is merely the straw that
broke the camel's back. Their markup on product should be way higher.

Also, that's assuming no increase in follow on transactions, and that all
coupons were cashed.

I don't buy it. Although it definitely could have been a net loss, it wasn't
of that magnitude.

~~~
dzlobin
Are you familar with the restaurant/food industry? For most places, profit
margins are pretty awful. I'll admit ~14% is low for the type of venue this
is, but believe me this is common

~~~
reitzensteinm
I think you're confusing gross margins on individual items with the overall
profit margins. My understanding - and I'm not especially familiar with the
industry - is that markup on individual items sold is high (after all, how
much does a cup of coffee cost to make?), but the fixed costs - rent and
employees - are also high.

I'm saying the number didn't make sense because you have to look at the
marginal cost of servicing those customers. The rent didn't go up because more
people were coming in. Extra employees were only necessary if the place was
already busy, etc.

~~~
mediaman
You've got it exactly right. I found data showing that the restaurant/cafe
industry (publicly traded ones, anyway) earn gross margins between 25-70%,
depending on the company and how they account for COGS versus operating
expenses (the real number, measuring only the raw inputs of goods per sale, is
toward the higher end of that range).

Retail is all about generating enough volume to cover fixed expenses.

------
ladyada
If you try to get new customers with price-cutting deals, you will get
customers who want & expect price-cutting deals.

If you try to get new customers with quality goods at a fair price, you will
get customers who will pay a fair price for quality goods.

------
qasar
im a chicago entrepreneur and had a crowd funding startup. i sat on a panel
with andrew last year before groupon got massive and know as much as anyone
about the inner workings of groupon (pun intended).

i write this to give some context to the comment below.

groupon (i dont think maliciously) uses the fact that they are sophisticated
and the small business owner isn't to their advantage.

you might think "so what? all is fair"

well, the small business community doesn't live in a vaccum. they talk to each
other and talk about groupon (especially here in chicago).yes, they don't know
how to create promotions (one of the real values groupon sales people provide)
BUT what they do talk about are these horror stories.

so whats the moral here? people aren't idiots and if groupon wants to make
sure their two sided platform survives, it can't abuse one side for the
benefit of the other.

~~~
noodle
so, then, would you think that there is a place for a business similar to
groupon but focuses more on trying to cut deals that encourages the growth of
repeat business and/or good customers?

~~~
qasar
absolutely. the whole digital promotion space is still ripe.

i used to work for the the 3rd largest broadline retailer in the US(SHLD) and
we were constantly struggling with this.

Think about it, right now if you're Target, how do you push promotions to
those who dont already shop at Target? TV is primarily branding, search is
primarily for...well specific product search. Nothing out there for true,
replacing the old sunday circular, promotions.

~~~
qasar
hint hint: there's a startup in there somewhere :)

------
zaidf
Like I keep saying, groupon's longterm value is very, very questionable.

The #1 value they are bringing at the moment is convincing shop owners to give
a _really_ kickass coupon. That's it!

That mailing list of theirs? Sure it's valuable. But send that same mailing
list a 15% off coupon typically found in the newspaper and they won't give a
crap.

And give the same groupon offer in the newspapers and...a lot MORE people
would use it!

~~~
patio11
I disagree. I could create a steep discount coupon. 50% off, bam! The trouble
is selling several thousand of them in a day, and my website has a lot more
visitors than the typical mom and pop shop.

Distribution is worth paying for. Perhaps not paying a multiple of LTV for.
But worth paying for.

~~~
zaidf
_The trouble is selling several thousand of them in a day_

(1) How does it matter whether I get 4K people to buy in in one day or over
one year? That part is over-hyped and makes for great PR. I am in the same
space(sort-of, blinkcoupons.com). Many retailers would prefer a steady flow of
new customers over the year versus a one-time rush.

So let's say you paid Groupon $40,000 to get 4,000 coupon sells by offering a
60% discount, I really believe you can spend $20,000 giving ads in the local
paper with a _kickass_ offer and get the same number of people to _use_ your
coupon(not just buy it). Remember, just because people buy the groupon does
not mean they use it--good for groupon, not so much for the retailer which is
completely banking on repeat biz.

As a child in India, I saw newspapers sell out occasionally because they had a
_coupon_. Back then, coupon by definition meant a _crazy_ offer. Since, the
idea of a coupon has been diluted to mean trash. And kudos to Groupon for
being able to convince store owners to give select kickass coupons like they
should have been doing all along. But I don't know why store owners will be
paying Groupon 60% revenue when they can run an ad in the local paper for a
grand and attract similar number of customers but at a lower customer
acquisition cost than Groupon.

(2) What's your product? If it's a virtual product(such as yours), I don't
think the same ideas apply. People have been desensitized with online tools
offering steep discounts. The same is not true with your local coffee shop.

 _Distribution is worth paying for._

Absolutely! Though this discussion is a more nuanced one.

We're basically debating if all other things being the same, whether other
distribution channels can provide a similar service to Groupon at a cheaper
cost. I believe they can!

But I'm biased. That's what my start-up is about :)

------
bradly
I spoke with a business owner recently that had used Groupon and he shared a
similar experience with me.

He said that with Groupon you must discount your offering by at least 50%, and
that you must share 50% the sales with Groupon. That means the most you can
sell your goods is 25% of there normal price. Where they made the mistake, he
said, was in not thinking it would be very successful. You are able to put a
max on the number of sells, but they only thought they would sell ~40 so they
left it open. They ended up selling over 800.

He said you have to think of Groupon as a marketing cost. Multiply the max you
are going to sell times the discount and make sure you are okay spending that
much on a marketing campaign.

~~~
vidar
If someone offers you a bad deal, you reject it. Simple as that.

------
BobbyH
One thing the article does not mention is "breakage": "Breakage is a term used
in accounting to indicate gift cards that have been sold but never redeemed.
Revenue from breakage is almost entirely profit, since companies need not
provide any goods or services for unredeemed gift cards."
<http://en.wikipedia.org/wiki/Breakage>

This article
([http://www.journalofaccountancy.com/issues/2007/nov/accounti...](http://www.journalofaccountancy.com/issues/2007/nov/accountingforgiftcards.htm))
says that the average breakage is 10-19%. Let's say it's 10% to be
conservative. Posie's Cafe said that over 1,000 customers bought the
promotion. A 10% breakage implies that at least 100 customers bought but never
used their Groupon coupon. Posie's Cafe only gets half of this, but it does
give them a free $300. I guess that's not that much, but if breakage is 19%,
190 customers would have given them a free $570.

EDIT: using kareemm's datapoint of 30-40% below, the breakage would be
$900-$1,200.

~~~
kareemm
i've heard from a few friends in the valley that groupon's avg breakage is in
the 30-40% range.

~~~
awakeasleep
What category of business do they run? How long ago did they run their
groupons?

------
itblarg
Groupon CEO re: their cut: “If we were economically rational, we would take
even more.”

[http://venturebeat.com/2010/09/15/demo-the-secret-of-
groupon...](http://venturebeat.com/2010/09/15/demo-the-secret-of-groupons-
success-is-good-writing/)

~~~
dasil003
I immediately thought of this quote too. I see this as sort of a honeymoon for
Groupon while people figure out how it really benefits (or doesn't benefit)
their business. Over time their margins will probably drop considerably, so
why shouldn't they take what they can get now? I can see how this sucks for
small businesses who get flattened by the runaway train, but is it Groupon's
responsibility to sabotage their own business model by performing due
dilligence for their customers? From what little I know everything seems
clearly above board.

------
jojomagictime
I work for a Skydiving company that has, to GREAT success, ran two GroupOn
promotions. We sell three different types of jumps, 10k 15k and 18k. The 10k
goes for $169 and is out of a 5 seat Cessna, available only on some weekends.
The 15k and 18k are available weekends and most weekdays and cost $199 and
$259. Our 15k and 18k jumps are out of a large, 15 seat aircraft.

We sold 10k jumps for $99. The COGS for this product is about $130. We cannot
disclose our cut with GroupOn, but assuming the average 50/50 cut, we're
selling these things for less than half of what it costs to produce. Why did
we do this?

1.We know that 50% of our gift certificates are never redeemed.

2\. We know that 60% of our customers purchase video and/or T-Shirts.

3\. We know that about 90% of our customers will jump from 15k or 18k. We just
ask that the GroupOns pay the difference in price. $30 to 15k, $90 to 18k.

4\. We know that many of our customers bring friends, sign up for our solo
training, come back for a second jump, post their video on YouTube, and tell
the world how much fun they had.

Our first run sold 800, our second sold 1000. GroupOn customers aren't awful,
but they seem to carry a higher percentage of snooty, complainy people. The
vast majority of our poor reviews on Yelp come from GroupOn people whose
experience really wasn't horrible, they are just particularly nitpicky.

GroupOn is a very dangerous game. I can TOTALLY understand how someone can get
their ass handed to them. However, that's part of the numbers game you play. I
agree with other comments, if you find a way to get 1000 people to walk in
your door and spend money, and you can't figure out how to turn that into a
positive for your business, then, well... Maybe you should do something else
with your money.

GroupOn is crazy awesome. We love them! We have so far sold 1800 skydives
through GroupOn! To put that in perspective, our busiest month this year we
put 400 tandems up in the air. In two GroupOn promotions we've sold almost one
year's worth of business. Staggering numbers.

~~~
MicahWedemeyer
Good job on crunching the numbers and making it profitable. Groupon is
definitely a win-win in some cases.

Did the Groupon people help you with all this, or did you have to figure it
out yourself? My main complaint is that Groupon doesn't seem to be looking out
for the small biz owners and steering them toward successful deals. It sucks
to feel like you can't rely on a partner to look out for your interests.

~~~
jojomagictime
GroupOn helped us a lot. They didn't really do much due diligence to see if we
could handle the promotion. They did however tell us what to expect, showed us
similar deals that had gone on across the country, told us to buy more phones
and hire more people to work them the day of our deal. They basically told us
to get ready for war.

Let me tell you. You have not known fear until you are on the receiving end of
a GroupOn. Those people are animals. It was like the Mongol Hordes were coming
to rape and pillage our business.

GroupOn is amazing. Like Andrew said, they breathed life into our business.
We'd still be here, but they changed everything.

We get the money up front, breakage is insane. The promotion we ran in March,
about 30% of people have redeemed their Groupons. And we have already had the
benefit of sitting on alllll of that cash this entire time. They aren't the
best customers, but they are pretty damn good. They buy things, they bring
friends, they purchase 12 GroupOns and use 3 of them. GroupOn is great. These
businesses complaining about being pillaged, they really have no one to blame
but themselves. I am by no means a savvy businessperson, but to me this was a
no-brainer.

------
eli
Having a hard time seeing how this is Groupon's fault. Maybe a better job
reminding business owners not to offer more coupons than they can actually
support?

~~~
jlees
Well, the basic economics of giving away too many coupons is definitely the
core of the problem, but it looks like Groupon aggravated it somewhat.

By taking a high cut and targeting discount-minded (rather than repeat-custom-
minded) clientele, the $8000 basically went down the drain, and the business
experienced more headaches dealing with testy Grouponers than they would
normal clients.

Part of this is a learning experience about what you offer as a discount, how
you offer it, and who you target. Instead of offering half-price cookies,
offer half-price vegan cookies or similar. Do a smaller test first (though
maybe Groupon doesn't allow that?) so you can get an idea of repeat rates and
discount-hungry one-off customers.

The word of mouth gained from this one campaign may well echo forward for
months to come, but it's still sad to see a business struggling when a site
like Groupon is supposed to be fantastic for both parties involved in the
transaction.

~~~
pavel_lishin
> By taking a high cut

This is what confuses me. Shouldn't the split have been determined before the
contract was signed? I don't understand how they could have made a deal with
Groupon, but not worked out who would keep what percentage.

~~~
potatolicious
Based on the author's blog post, the split was determined beforehand, but
Groupon did not allow them to set an upper bound on coupons sold. This seems
to be a recurring story - business owners willing to take a loss for marketing
via Groupon, but with no effective ways of controlling an upper cap for this
loss.

------
vaksel
at this point groupon has more or less a monopoly so they can easily rape the
businesses..

but this article seems to blame groupon instead of the business owner.

1\. why would you price your promotion at a loss? 2\. losing "$8,000" may
sound like a lot...but in reality it should be looked at as $8,000 worth of
advertising. And getting your message out to 200,000 or so local customers for
that little isn't that bad.

~~~
jcnnghm
1\. That's groupons business model. The average profit margin in the service
industry is less than 10%. If you give people a 50% discount, you are
definitely going to be losing money. The idea is that you let them try your
place, then they keep coming back. In practice, most of the places I've talked
to haven't seen it this way.

2\. It's really expensive for what it is, and could easily tank a small
businesses cash flow. I know of two different places that did $30 gift
certificates for $15. Of the $15, $7.50 went to Groupon, so the businesses got
$7.50 per transaction. Both sold over 1000 coupons. If half of those coupons
are redeemed in the first month, and it costs $27 to service each $30
transaction, you would see a negative cash flow impact of $9,750, and a total
cash flow impact of $19,500. The average restaurant spends about $850/month on
advertising, so a single groupon would soak up their entire budget for two
full years.

Everybody that I've talked to that has used groupon (~10 restaurants) has said
that they would never use it again. It's too expensive, and the people that
buy it aren't the people they want to attract.

Ultimately, I'd be surprised if somebody else didn't come in and offer the
exact same service for free. It doesn't take a genius to sell stuff to people
for less than it costs. Incidentally, I did a survey of some of my customers
(<http://barsannapolis.com>) about offering the service for free, and they
largely weren't interested because it doesn't produce the results they want.

~~~
mediaman
Both of your statements are based on equivalency between marginal cost and
average cost.

The marginal profit in the service industry is not less than 10%. It would be
nearly impossible to pay for all the fixed costs of running a service company
(rent, labor, depreciation of PP&E) if that were true. Yes, the _net_ profit
margin is less than 10% (typically 5-7% for restaurants). The two are not the
same.

Many gross margins in the service industry are 30-50%, or often higher. Think
of the actual cost of a cup of coffee, or of the ingredients in a sandwich.
It's not high relative to the price charged. But quite a few must be sold in
order to cover the fixed costs of keeping the store open.

This is why location matters so much in retail. It is not because it allows
you to charge significantly higher prices, usually. It is because it gets you
much higher volume, which is principally what determines the net profit of a
retail outlet.

That's why Groupon actually works quite well for many such service businesses.
It drives volume, which is what matters for net profit. But it would be loss
generating for a low gross margin business to use it, such as a high volume
mass retailer.

~~~
jcnnghm
If you are losing money on each transaction, you can't make it up in volume,
you can only lose money faster. Your gross margin would have to be 75% to make
money with a groupon promotion, without accounting for any of your fixed
costs. The only thing that might be able to touch that is some alcohol sales,
assuming you could control employee theft and shrinkage, which you can't.

Let us also not forget that a restaurant isn't infinitely scalable. If your
tables are full of people using coupons, you can't just keep packing them in,
eventually people are going to go somewhere else, and the guy that is going to
leave isn't the one that already paid.

~~~
wooster

       The only thing that might be able to touch that 
       is some alcohol sales
    

Or coffee. Drip coffee margins can be greater than 70%. Espresso drinks can be
greater than 80%.

------
bond
"John told me that when the consumer pays less than $10, Groupon usually takes
100% of the money."

How sweet this is for Groupon, they take it all with almost no costs at all...

------
dminor
A Groupon salesperson called us awhile back to see if we were interested. We
crunched the numbers, wondered how anyone made money using Groupon, and told
them "no thanks".

In retrospect, I can see it working in a few cases:

1\. You are not well known and will attract new customers (marketing expense).

2\. The Groupon is worth much less than your typical sale.

3\. Your overhead is fixed and you are not at capacity.

------
kenjackson
Great quote from the article: "When you buy something cheap and bad, the best
you’re going to feel about it is when you buy it. When you buy something
expensive and good, the worst you’re going to feel about it is when you buy
it." Of couse, this assumes that you can afford it at all. But largely
accurate if so, IMO.

~~~
dean
This also assumes that expensive == good. In my experience, that's not always
true, or even often true. Then you feel really bad.

~~~
kenjackson
"expensive AND good" is part of the quote. Both are necessary for the full
effect of the quote. But yeah, if it's not true, then you feel really bad.

------
desigooner
It seemed like the business owner jumped in with a no-holds barred approach as
far as discounts were concerned in order to get more feet into the shop.
Improper planning, failing to study the market and unrestricted incentives
were the points of failure and not Groupon. If anything, they just got a big
boost as far as the # of customers was concerned.

Maybe they should have restricted the $ amount or number of coupons given out
in the promotion or introduced some conditions instead of just going all out.

------
heyjonboy
_"Groupon’s $3 was almost pure profit"_

Completely wrong. Just because Groupon doesn't have any variable cost doesn't
mean all of their revenue is profit. Credit card processing, bank fees, and
chargebacks will eat up 2-5% of the (gross) revenue, and Groupon spends much
more than that buying clicks to drive traffic to the merchant's deal.

------
hexis
I want to work with partners who want to help me succeed. Groupon seems to
have failed that test in this instance.

------
CGamesPlay
_"When you buy something cheap and bad, the best you’re going to feel about it
is when you buy it. When you buy something expensive and good, the worst
you’re going to feel about it is when you buy it."_

I think this is the best takeaway from the article generally (not focusing on
the Groupon aspect).

------
jsm386
And the hits keep coming for Groupon today:
<http://techcrunch.com/2010/09/16/groupon-photography/>

_A photography deal offered on Groupon in Atlanta yesterday turned messy when
it was revealed that the photographer had promoted her work with stolen images
and was far from equipped to carry out the terms of the Groupon._

------
dailo10
The merchant should NOT have run the promotion at a LOSS. The promotion should
have been at least break even, if not slightly profitable.

~~~
brk
This is a nice statement to make, but how do you propose they could have done
that?

Groupon seems to demand at least a 50% discount on normal prices, and then
seems to want to take between 50 and 100% of the actual groupon coupon cost.
That leaves the merchant able to collect somewhere between 0 and 25% of their
standard pricing. Other than software businesses, there are few few shops that
have enough of a markup to be able to sell something at 25% of face value and
still make money on the product itself, much less cover all the additional
overhead.

~~~
hugh3
Well then, I guess they shouldn't have used groupon, if groupon is only good
for drawing in customers by extreme loss-making activities.

Bashing your head against a brick wall hurts, but the solution isn't to find
the least painful brick, it's to stop bashing.

------
grantjgordon
I've always had a hint of doubt in the back of my mind about Groupon. They're
obviously printing money for themselves, but with the terms they're offering
local businesses, at what cost? Conversely, eventually local businesses will
wise up and demand better terms, so the market will balance itself, but the
casualties during the interim are a real shame.

------
troyk
Sounds to me like an ill attempt by the merchant to cover her ass for treating
a loyal customer like an unwanted frugal-monger.

Doesn't change that her loyal customer (Lucinda) is out $6, and Lucinda is
very likely to find a new place that knows how to serve up, "Thanks for your
patronage, we'll do our best to keep you coming..."

------
yock
The problem isn't Groupon or the shop in question. People were creating
multiple Groupon accounts in order to get multiple copies of the offer from
this shop. Dishonest consumers are the problem here, though this is a problem
that Groupon could do more to curtail.

~~~
marcusbooster
But this is exactly what a small business is buying from Groupon. If the
quality of their lot is worse than other advertising, then more the reason not
to partner with them.

~~~
pyre

      > But this is exactly what a small business is buying from Groupon.
    

But this is not what Groupon is billing themselves as providing though...

~~~
marcusbooster
What's that saying? - If it's free, then you're the one being sold. They make
their money by selling to small business.

From the website:

    
    
      Groupon for Businesses
      With an unparalleled ability to drive hundreds - even thousands - of
      customers through your door ...

~~~
pyre

      > Dishonest consumers are the problem here, though
      > this is a problem that Groupon could do more to curtail.
    

This is what I was talking about. Groupon is not billing their subscriber list
as a group of cheap-o's that will only use the discount and never return to
the business and try to use the discount multiple times -- which they obtained
by registering for Groupon multiple times under different names/aliases --
while they are there for their single visit.

If Groupon were to describe their subscriber list as such, then I could see
their business start to decline, no?

It would be interesting to see what the average conversion-rate from one-time
to repeat customer is based on Groupon coupons.

------
unohoo
Lot of you guys are blaming the merchant for agreeing to such a deal. While I
agree that the cafe owner should have worked out the economics of the deal,
but you seem to be ignoring the merchant perspective across all these Groupon
deals.

The biggest goal of merchants signing up with these group buying sites is to
get customers and hope that a big chunk of these turn into repeat customers.
Unless the merchant is selling distressed inventory (eg: slow business hours
etc.) the merchant is not making money on these deals.

And thats the number one thing we strive to accomplish at BloomSpot (shameless
plug here). After all, if there's no value for the merchant in such deals,
eventually, they'll just stop participating. We want to make this a win-win
for both the merchant as well as the end user.

------
Groxx
So... the cafe was _stupid_ , and nearly destroyed themselves because of it.

Capitalism / evolution says they had it coming. Yes, Groupon certainly took
the assholish route, but taking advantage of stupidity _is_ within their
rights, and even within expected behavior in a marketplace.

FYI for future sales through _any_ intermediary: _know your terms_. If they
charge $X, and you want to sell something for $X, _don't do it_ because you'll
be left with $0 (unless that's what you want). If you might not be able to
handle above a certain volume of takers, _restrict the number of sales_.

------
codexon
Anyone wonder why Redfin is getting so much coverage on HN recently? They
don't seem to be a YC company.

I just took a look at their Wikipedia entry and noticed that they received
investment from Vulcan, founded by Paul Allen. No wonder they called Bill
Gates a hero in their previous blog post.

<http://news.ycombinator.com/item?id=1694538>

~~~
Revisor
Because they write interesting articles.

~~~
codexon
I really didn't think this article had any new insight.

It simply boiled down to: let's capitalize on this Groupon buzz and say we
won't make the same mistakes.

Their article on Bill Gates was simple link bait.

------
igravious
Who is GlennKelman and why is he/shey only submitting redfin articles and who
are redfin and why are the articles deliberately contrarian and who is
upvoting them?

~~~
Splines
That's not hard to find out.

Glenn Kelman is the CEO of redfin, which has a very cool Google Maps-like real
estate search. I haven't done business with them, but have used them as
another tool during my house-buying searches.

I wager that Glenn (or someone on the redfin team) is using HackerNews as yet
another place to market.

Personally, I don't mind. It's interesting reading.

~~~
igravious
You know I'm getting sick of the downvoting to the depths of hell any post
that crosses the group-think party line of this place. I don't think that it
is okay that a CEO of a commercial site is cross-posting here to boost traffic
to his website. So what if you've used their services in your personal life
and found them useful? How does change anything? My expectation of a site like
HackeNews and SlashDot or anywhere like this is that the posts are posted by
ordinary users because they find them interesting. If you get upvoted for
liking posts that are a) crud and b) probably only used to drive traffic to a
commerical website and I get downvoted because of the same then this is a
place I don't want to be. Personally I do mind.

~~~
Splines
I guess I misunderstood your original post. It sounded like you didn't know
who the poster was, and I looked it up for you and shared some context of my
experiences with them.

Personally, I do think it's ok that a CEO is posting here, even if it is for
financial gain. I feel like this site is like a tech-news link aggregator with
a business spin. Having a CEO of any company is (I think) of value to the
community since they can share their experiences in starting a company (it
looks like Glenn Kelman was a co-founder of Plumtree as well).

In any case, if you disagree with the article (i.e., you think it's crud),
then say why. Let's have the discussion. Complaining about it isn't going to
get you upvotes, if that's your thing.

Take it easy. No harm, no foul.

~~~
igravious
I didn't. I looked at their user info and it says nothing - says it was
created 9 days ago and the user only submitted 2 redfin articles and nothing
else. Normally entrepreneurs and CEOs round here write a short note that they
are the founder or CEO or whatever. I didn't put 2 and 2 together. Mae Culpa.
But do I now have to double check every submission? Wouldn't it be "normal" to
say that you're affiliated if you're affiliated. My hunch says yes.

Personally, I don't think it's ok that a CEO posts here for financial gain - I
don't like that motive and I don't like in what direction it would take this
site. I feel like this site is like a tech-news link aggregator with a
entrepeneurial spin. I don't think it should be used by established businesses
to boost traffic. Yes haveing a CEO of any company is of value to the
community but only if they are here on merit, and not if they try to
manipulate the community.

Like I have said again and again, it is neither here nor there if I agree or
disagree with the article - the discussion I want to have is that I think this
one: this guy when he submits 2 posts (written by himself on a corporate
blog!) one day after another on topics that are guaranteed to cause a stir is
cynically trying to boost traffic plain and simple. I don't want up-votes, I
just think it speaks of the mob mentality and group-think on HN that you can't
dissent or point something out like this without being down-modded.

I am taking it is. Thanks for taking so much time to respond. I hope you see
my point of view. I don't see why I keep getting down-modded for it. You seem
reasonable and if you say you feel this kind of thing is fine then I'll
certainly take you opinion into account and I feel like you're the type of
person who would extend me the same courtesy.

Phew!

