
Loopt Tries a Groupon in Reverse - sama
http://blogs.wsj.com/digits/2011/06/22/app-watch-loopt-tries-a-groupon-in-reverse/
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nhashem
While it's a theoretically cool concept, the actual implementation doesn't
appeal that much to me as a consumer and I'm not sure it'll really appeal to
businesses. Would I want to get $20 at a nearby pizza place for $10? Sure. But
how useful is it if I have to wait an indeterminate amount of time (if ever)
to get the deal? I'm likely to only suggest local businesses that I frequent a
lot anyway, and how useful is it to them to offer discounts to mostly
regularly paying customers?

That being said, I do think this is moving the industry in a direction for
variable prices for local businesses. Imagine a real-time feedback loop where
it's 4pm and you could ask your local pizza place for a discount and they
could instantly reply whether they granted it or not. It's a lull before
dinner and they have some pizzas from lunch they've just kept warming up, so
they grant you the discount. Or actually a kids' soccer team shows up and
takes over the place so they decline the discount.

This doesn't work so well with resellers (which is pretty much any
restaurant), but it could definitely work with service businesses that have to
pay their staff whether clients show up or not. We'll see if companies like
Loopt have this vision in mind and whether they can make it possible.

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patio11
A friend of mine has a company in Japan which pretty much solved this.
Solution: big digital billboard in mall which aggregates tweets from mall
merchants. If nobody is getting their hair cut, they tweet "$5 off for next
person at Cheap Cuts" from cell phone. Merchants/mall apparently think it is a
gift from God.

~~~
stcredzero
_Solution: big digital billboard in mall which aggregates tweets from mall
merchants._

A virtual billboard in the form of a smartphone app might be preferable in
different kinds of public spaces. It might also be a good adjunct to the
digital billboard.

~~~
thwarted
If twitter added geo-location specific streaming search results, they'd have
this.

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patio11
That seems strictly inferior to Groupon: it cannibalizes existing customers by
design, but to get there, you need to nondeterministicly charge people's
credit cards. So it is a reward card, with the restaurant paying 50% of reward
values to, um, not reward their customers except weeks after the fact some of
the time.

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Hovertruck
Honest question... Does anyone on HN use Loopt? I've tried it a few times over
the years and it never really comes to close to making me want to continue
using it.

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loumf
I tried, but it was before iPhone had any kind of push notifications, live in
a low population area, not a lot of my friends are early-adopter social tech
types, and I'm too old to want to hang out with random people I saw on Loopt
-- so, it didn't work for me. I'd be willing to give it another try.

Interestingly, in the meantime, there was a lot of foursquare adoption among
friends and in the area -- enough to get network effect benefit. I don't think
many of my friends have heard of Loopt.

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Alex3917
I doubt this will work because it doesn't take into account Zipf's law. The
problem is that we live in a world where 1% of the population creates 90% of
the content, so it'll be impossible to get enough people actively
participating except for maybe with places like Shake Shack that don't need it
anyway. If they created a new service specifically designed just for this then
it might work with a few tweaks, but creating something just for the Loopt
user base seems like a dubious decision.

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nikcub
I can't see this variation of the model working because usually when you are
near a store, the deal or offer is something that needs to be acted on within
a few minutes

Imagine you are going out to get lunch. In the GroupOn model you have already
pre-purchased a deal and you can plan ahead. In this Loopt model you can't
make an instant decision based on where you are since it involves going back
to loopt, etc. etc.

This would be more interesting if vendors could list their deals or vouchers
on loopt and it would alert you when you are near one (based on location
and/or time)

Ten years ago there was a trial of a similar system - the name of which I
cannot recall. But it involved sending bluetooth alerts to your phone when you
were near a store that was running a promotion or deal. I used it once to grab
lunch and it worked well (you would give your phone number at the counter, the
discount was ~30% IIRC).

Vendors would likely be interested in a system where they could specify
something along the lines of: send me a thousand customers over the next month
between 2-4pm who are within 2 miles of my location and are interested in 30%
off a pizza. Do not send me customers who have already redeemed a coupon in
the past x months. The problem is that type of system would involve a large
upfront investment from loopt in going out and getting the customers onto the
system.

Loopt have the location users, but not the deals. On the other hand GroupOn
have the deals, the vendors and the users but do not have the location system.
One of these is easier to build than the other

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rdl
I think this is interesting -- I'd probably use it in high density areas with
lots of options, only. For instance, there are ~50 restaurants in Castro St in
Mountain View. I've been to 15. I'd like to try about 20 of the others, so
signing up for all of those would make sense.

It's probably best suited for finding new service providers for recurring
needs (gas, car washes, oil changes, ammunition, range time, food) and less
suited for one-offs (funerals, weddings, ...).

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americandesi333
The key here is timing. Its easier for Priceline to check on the bids with
airlines because most of the airline systems support rapid data transfer. In
the case of restaurants, it is difficult to predict and build a automated way
to get 'approvals'. Therefore, the time it takes for them to get answer back
from the restaurant will determine the success of uDeal.

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gigawatt
Taking the immediate gratification away from the consumer and giving it to the
business, combined with surprise credit card charges, makes this pretty
unappealing. At least to me, as a consumer.

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BrandonM
Have any of these customer-generation people actually run a brick-and-mortar
business themselves? How does anyone expect a business model to be sustainable
in the long term when it relies on companies selling their goods at _a
quarter_ of their typical price?

A business wants a reliable stream of customers, with predictable peaks in
activity. When a startup addresses _that_ at a price that businesses can
actually bear, then I'll believe the company is going somewhere.

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dot
sounds like a good idea in theory, but the reason some businesses tend to like
groupon is that it brings NEW customers in the door. it's a marketing platform
and businesses know that can be expensive. 50% is a lot to pay for a customer
rewards program.

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sama
our hope here is that this will bring a higher quality set of new customers in
the door. word of mouth referrals tend to be pretty good. if i create a deal
at a place and share it with my friends to get critical mass, that may be a
better crowd that a daily deal email list.

~~~
geofflewis
But given a deal is contingent on your salesforce convincing the merchant to
work with you (on a very tight timeframe / compressed sales cycle), doesn't
this mean that by definition, most of the deals desired by users will not come
to fruition? Won't this result in a poor experience for the majority of users?

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badusername
Hmm, I request a deal from a business nearby. I am already there physically,
but I don't get anything at that time, for all the effort I've put into
getting there.

I have moved on, it is three months later - I might be in a different country
for all you know - and voila, a credit card transaction tells me that I've
purchased some deal that I probably have no longer any interest in.

Seems like it could have worked in 1980, but for today, I see gaping holes in
user experience.

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jhamburger
"Hi, I have 15 customers I've led along to believe they might get a half off
deal at your restaurant, are you game or should I just tell them your word is
no good?"

~~~
dguaraglia
This is actually quite an interesting (if somewhat poignant) argument. In a
way your name as a merchant might suffer even if you didn't add yourself to
the system. This might be the Achilles heel of the whole operation.

Edit: typo. 'Achilles Hill'? Really?

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brianbreslin
If they start offering reverse deals, will everything become like a turkish
Bazaar, with everything basically being haggled on the fly?

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americandesi333
When I read this article, it screamed Priceline to me. Its essentially doing
the same thing that Priceline does for the travel industry. Its asking
customers to select a deal or 'bid' on a deal and then uses that knowledge to
close the deal with the restaurants. Like Priceline, Loopt will already have
the credit card info and I am guessing the customer will be charged
automatically.

The key here is timing. Its easier for Priceline to check on the bids with
airlines because most of the airline systems support rapid data transfer. In
the case of restaurants, it is difficult to predict and build a automated way
to get 'approvals'. Therefore, the time it takes for them to get answer back
from the restaurant will determine the success of uDeal.

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revorad
This sounds like enabling haggling in markets where traditionally it hasn't
been done (even in Asia where haggling over price for any product is quite
common).

If I say I will go to a restaurant on the condition that I get a 50% discount,
I'm probably not going to spend much more there or go back again without a
discount. Not sure this is a winner for businesses.

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gigantor
Too much time between the request and delivery. There needs to be some sort of
instant gratification for this to fly, otherwise it's essentially asking users
to do free market research. Profit sharing with the users should the deal come
into fruition would certainly inspire them to continue populating the merchant
database.

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ssozuer
It sounds good that using loopt to search some kind of stuff which you need it
instantly(like cafe,bar..) in a local place you are not familiar, rather than
using it like Groupon's vision.

The most importantly, local markets should feed back the system instantly and
people can make proper decisions at that moment.

I think, mainly idea is cool.

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webjprgm
Sounds stupid for the small businesses, because only people who already know
about a place will ask for a deal there, so they won't be getting any new
eyeballs and probably no new customers either. It will just be people wanting
deals at places they already go to.

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sdizdar
But just imagine that they can implement something even cooler: I can actually
see menus of these pizza places with prices - and information whether they are
open or closed? Really...

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bugsy
As described, that's just way too complicated. It also fails completely as
advertising since the people have to start out wanting to eat or shop at the
place.

~~~
dguaraglia
You are missing the point: if it helps you fill tables with customers, it is
good advertising regardless of the customers being new or not. Also, how is an
offer based on what you _know_ people want worse than one published to the
general public in, say, a newspaper ad?

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bugsy
Customers proposing that a store they know about and already wish to shop at
lower their prices is not the same thing as "advertising". To call this
advertising as you just did is a misnomer.

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paolomaffei
This is wrong on so many levels.

The first one is that as a business you are supposed to use deals to bring in
new customers, not to let the ones that already know you have a discount

The second one is how it'll be marketed to business owners, I understand that
a fool is easily parted with this money but this is borderline stupid

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agscala
Good idea, but u-Deals is a dumb name.

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greencircle
It sounds like blackmail. I'd be just as embarrassed using Loopt as I would be
using Groupon.

~~~
StavrosK
I don't understand, how is it blackmail? It sounds useless to the store owner,
because people basically say "I want cheaper things, give them to me", but it
doesn't sound at all like blackmail.

