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Groupon CEO Apologizes For Poorly Executed Offer In Japan (info.groupon.jp)
65 points by patio11 on Jan 17, 2011 | hide | past | favorite | 43 comments

Aside from missing the opportunity to bow a time or six, I think this was close to perfect for execution of an apology (both by Japanese standards and for companies generally). Heartfelt apology, total acceptance of responsibility, comes straight from the top, makes full amends to customers, identifies specific changes made to address problem in the future, closes with thanks to customers.

Edited to add: For extra credit, it might have been worthwhile to apologize to the merchant for failing to prevent a situation which caused their wares to be presented in an unflattering manner.

This probably stands reality on it's head, but what actually happened on one particular day in Tokyo is not maximally relevant to Groupon's Japanese business, and having a reputation for being magnanimous and savvy to how the game is played can only help them in the future. Again, though, I think they did really well.

"Aside from missing the opportunity to bow a time or six"

Bowing in this situation seems like a high-risk, low-reward behavior. He might have moved the apology from an A to an A+, but he also might have made the situation worse without realizing it. If I bowed for an apology, I feel I would make any number of rude mistakes, like maintain (or not maintain?) eye contact, have the wrong facial expression, not bow deep enough / shallow enough, slouch, not hold it long enough, do it sitting, or check Twitter at the bottom. When you don't understand a culture, it's usually reasonable to be polite and gracious within the confines of your own. Maybe Japan has different expectations, but I've worked with an uncountable number of foreign nationals, and it's understandable when they don't extend a handshake (typical American greeting), or yell "Hey, fuck you! How you doin'?" (typical New York greeting).

What you are saying is plausible, but it does not match with my experience. Folks who are easily offended need to look away now: there is a porpoise show at the Nagoya Aquarium. At the end of it, the dolphins "bow" to the crowd. Everyone says "Aww, how cute!" because the important thing isn't that the dolphin bowed properly, it is that you just saw a dolphin bowing.

In this regard, foreigners are a lot like dolphins. You're going to be graded on a curve and that curve is going to underestimate you severely -- one can (judiciously) take advantage of this sort of thing.

My ex-ex-job was Coordinator of International Relations for a tech incubator, and I never saw someone lose points for trying their six word Japanese vocabulary, a bow, etc. It may actually be more difficult for those folks who are in the uncanny valley of between "fluent enough to be assumed competent" and "actually competent." (cough Oh the stories I can't tell. cough)

Tangentially related, it is occasionally to one's advantage as a foreigner to pretend ignorance of Japanese social norms. I am not generally a fan of it, but sometimes duty wins.

I'd also add, "eat everything in sight". I've found that more than anything, nothing can symbolize that you respect a culture more than eating their food with them, respectfully enjoying it and just trying to have a good time. It shows an interest beyond superficials and most people enjoy sharing something about their culture with you through food.

You are what you eat, and if you eat what they eat, you are in some sense made of the same stuff.

Humans like to put other humans in two boxes, "us" or "them" and nothing can get you over the threshold and into the "us" box better than eating their food. In my experience, I've also found that most people want people in the "them" box to be in their "us" box and will lightly test your suitability with various social normalization tests -- often in the form of some local delicacy that they know foreigners won't be into. "Here! Try some of this delicious fermented cow stomach!"

(it also helps that most places have a friendly social structure around alcohol consumption, and chasing bites of random animal innards with some hard booze seems to do a good job of killing off whatever might not agree with you)

It also usually follows that they'll see you put a good effort into meeting them (culturally) and most folks will give you a wide berth to stumble through their social customs.

Without knowing anything else about a place, I've managed to muddle through relations with Peruvians, Ecuadorians, French, Russians, Chinese, Koreans, Saudis, Germans and a few others simply by sitting down at a table with them and breaking bread and trying to mind my manners.

In a few places, this immediately broke down walls of outward hostility and the night often ended with some kind of embarrassing duet at a Karaoke bar or similar.

That does help. My dad was in the army and was stationed in Korea for a few years. One weekend he was eating lunch with some Koreans he would be working with. Well, near the end of the meal he was offered some burnt rice. He graciously accepted it and ate it. After the meal his translator informed him that burnt rice was considered a delicacy in Korea. Furthermore his predecessor had been offered the same dish and refused. His predecessor lost a lot of respect by that decision

I and my japanese wife have the feeling that this apology is really "light".

I mean, he is alone in a shirt, no suit, no tie, seamingly from his personnal computer (no pro involved, no one else), with an improvised background. It may be felt as sincere and straightforward, but on the other hand it lacks seriousness and commitment. One would say he didn't care to do something more formal, or even to get someone to help, and just hacked a quick reply before getting home.

I seems more targeted at future investors than to angry customers.

Edit: perhaps I should add that the apologies from groupon japan on the official site where basic style, plain text ones. This is the first video published on the issue, so it's a bit jarring to see something so casual.

I agree completely. Compared to any other public apology I've seen in Japan, well his simply doesn't compare. Unfortunately I think he comes off as the insensitive-to-cultural-norms American which actually does more damage in Japan than it does to smooth over problems, at least in my experiences living there.

The New Year osechi meal is like Thanksgiving or Christmas. People pay a lot of money to have a good meal. I saw photos of the results of this deal featured on TV news several times over the past few weeks which is pretty significant. They are advertising extremely heavily on the web and TV in Tokyo so it is really important for them to get in front of this and handle it properly.

Merchant protection is something that really needs to be done better.


I also liked that it was all done in one take and it wasn't given corporate PR-treatment, it was just a guy in front of his webcam. Also quite clever to do it at the office, when everyone has gone. Gives the impression of the hard-working shacho (which I'm sure he is, anyway).

It came across as a business owner who genuinely cares about customer experience.

This is exactly why I think Groupon is way more than just another group-buying site. They not only have people on the ground in so many places (in a product where first to market seems to have a huge advantage), but they also are savvy enough to understand social norms in the various countries. Really cool.

That's probably a good checklist for corporate apologies in general.

To apologize is the first single thing I was taught during my 'Hourensou'/報連相 training at the Japanese company I'm working on. Whenever something bad happens, you first have to put yourself in their shoes, and just apologize."Moushi wake gozaimasen...". It does not matter whose fault was it, before trying to explain anything you have to first apology and then you can explain, otherwise it is going to be considered as rude.

I doubt this is OK by Japanese standards. Did anyone commit suicide?

I'm going to charitably assume you are neither trolling nor going for a boorish Reddit joke: Japan is a highly developed Western nation. In cultural studies, "Japanese people commit suicide to apologize" is one example of something that might be called a narrative. When you say it, it isn't just saying something, it is doing something. One purpose to which that narrative has been historically employed, both by some foreigners and some Japanese people, is to exaggerate the difference between Japanese people and everyone else. Another reason is there were, historically, a small handful of suicides which were extraordinarily public and so garnered disproportionate media attention. They are now several decades old, and are about as instructive regarding Japanese culture as school shootings are instructive about American culture. No morally responsible person would suggest that shooting up school is normative behavior in response to minor slights.

There are forms of apology which are distinctively Japanese. One is a videotaped press conference during which a speech very similar to that video would be delivered by the CEO. He would likely be accompanied by three or four people close to the matter. At a scripted moment during the speech (likely, several of them), all will simultaneously bow deeply. On the video you would hear audible clicking noises as every print photographer in the room simultaneously went for the photo opp, because Japanese papers run with photos of bows for apologies the same way American newspapers run with photos of handshakes for peace treaties.

If you're serious: patio11 has lived in Japan for many years and I think it's safe to say that he has a good understanding of Japanese cultural norms.

If you're not serious: This joke is in extremely poor taste.

He hasn't lived in Japan very long at all if he doesn't recognize that this is one of those stereotypes with some significant basis in reality. Japan has almost twice the US's suicide rate, and it is indeed an act with heavy cultural significance.

Suggest removing sticks from nether regions... both of you.

If you read Patrick's response you will see it is polite, realistic and nuanced. Your comment: not so much.

Japan has twice the suicide rate which is still not a lot. It's about the same as Finland. This is not a subject that can be (nor should be) easily reduced to a "Japanese people commit suicide a lot" kind of stereotype, so lets not do it.


Japanese reaction on news announcement forum:

"Apologize in Japanese." ← Most popular

"Apologizing in a shirt? Wear a suit, you trash."

"Groupon is a fraud outfit." ← Due to other controversies

"Groupon CEO is a kid? No wonder..."

"An American's apology has no meaning. He was even wearing casual clothes. This was more like a an excuse rather than an apology. He didn't even bow. He made things worse."

"Groupon is run by a foreigner?"

"The youtube account has videos of them abusing a dog. I'm reporting this."

Other controversies: People buy restaurant coupons with an expiry date in X months. They call to make a reservation and are told that they are fully booked for X months.

People are sold chinese made gyoza. This fact is not stated in the advertisement which has some fishy statements. This is particularly sensitive because chinese foodstuff is worthless in Japan.

Taking something a 2chaner or a Net Otaku says seriously is a humorous issue foreigners in Japan have. (Not sure if you are or not0

Chinese foodstuff is cheaper and not worthless in Japan. I know; I buy Chinese food in Japanese supermarkets all the time and I'm not the only one. It's the only way to get garlic for less than 3$ per head. It's not labeling food as Chinese that is a huge no-no in Japan (like the fish problem they had last year)

The upper class types I know think the Internet is low-class and never post on message boards or news discussions. Much like how few people here post in CNN discussion threads. It's like arguing with the lunatic fringe; why bother?

In the end, in most cases, the media manufactures consent and everyone forgets about it.

Given your average anon forum poster I'd regard the lack of comparisons to the Nazis and failure to call for the CEO's untimely and grizzly death a win.

For people reading this, just remember, /b/ didn't like the apology either.

My feeling is that /b/ has a surprisingly high density of Japanese cultural experts -- what with considering the large number of high quality Anime subtitle work coming out of parts of that community.

I think they usually hang out around other, Japanese-related boards. /b/ has little respect for anime or anything in general, and it's almost impossible to organize anything in the huge, fast-moving mess it has become.

On the other hand,

I think fair amount of Japanese will be satisfied with this, and even like Groupon more than before the incident. It looks like similar to apologies done by Japanese executives, though Mr. Mason did not do deep bow.


Yep, having an English CEO apologize in English for something that happened in Japan is of course going to be controversial.

Some context for those who want a quick summary of what happened and why the apology.

- In Japan during the first few days of the new year, they traditionally cook meals called osechi-ryori to celebrate. But nowadays, people just buy premade meals on line and have them delivered.

-Groupon advertised with a company called Bird Cafe to have a special discount on the meals.

-Bird Cafe could not handle the amount of orders, and delivered late and with bad quality. When the meals arrived they were no where close to the advertised pictures. Pretty much it was like ordering a hot meal, and what was delivered was a microwaved frozen dinner.

Many customers were outraged and the blogs lit up in Japan about the mistake on Groupon's part.

The video is about apologizing for the mistake and talks about how to ensure such quality issues do not happen again. Mostly by making sure the companies they work with can handle the orders and uphold their product as advertised.

Watching this makes you wonder what stops all companies from responding this way when they screw up. Is it really something as cynical as the lawyers running the show? I don't get it. A heartfelt apology goes such a long way towards rebuilding customer trust, it's a shame that more people aren't willing to lay it on the line like this. Compare this response to Kevin Rose's handling of the Digg v4 disaster. We all know what happened in the latter case, but I wouldn't be surprised if this helps, rather than hurts Groupon.

Class act.

A lot of people cannot accept the fact that they or those under their command commit mistakes. Even if they didn't do it personally, they have to take personal responsibility for those under them, for the good and for the bad.

I'm a big fan of groupon, but this situation is going to repeat itself, I'm sure.

Recent example:


For those who don't read Japanese, that's a mom&pop-like Thai place doing a 500-yen ($6) all-you-can-eat coupon.

They sold 3500 coupons.

I just can't fathom the economics behind that one.

I can't believe I'm defending Group on but.. the normal price for that set is 1000 yen. Furthermore, it's for the lunch menu (ランチバイキング) and the time restriction is such that I doubt they'll ever have to honour all of the coupons. (Furthermore, they are cooking in bulk and you are stuck with whatever they have; I doubt they will strain themselves with the deal)

I can think of a few places that are all-you-can-eat (tabehodai) for 1000 yen. I wouldn't bet on the quality of food, but sometimes you luck out. 500 is insanely cheap, but it is near the break-even point (if you aren't including rent)

Groupon also takes ~50% of the total selling price.

So you are really looking at 250 yen; Around half the break-even point by your estimates.

the client business does not get 100% of the sale of each coupon.

Groupon takes a commission which varies but is reportedly around 50%.

So the client business gets 250-yen per coupon.

Google translation link (somewhat intelligible) for the benefit of people who can't read Japanese: http://translate.google.com/translate?u=http%3A%2F%2Finfo.gr...

My bad. The video is in English -- watch that and you'll get most of the benefit.

The other Japanese text reads (my rough translation, you get what you pay for):

To our customers who ordered Bird Cafe [n.b. name of advertiser]'s "Kinsei Osechi" [n.b. name of product -- osechi is a a food box delivered at New Years], related parties, and Groupon's fans: we are sorry for having caused you trouble with the Kinsei Osechi Groupon offer. Our CEO Andrew Mason, founder of Groupon, explains how Groupon will take the utmost measures to stop similar incidents worldwide in his apology message:

Video goes here.

Not only Groupon Japan but all worldwide Groupon companies will take corrective steps to prevent this sort of occurrence from happening again. The measures include:

+ Strengthening pre-deal investigation of merchants

+ Improving the setting of deal size limits [to prevent overwhelming merchants' ability to deliver]

+ Establishing a dedicated customer support office for purchasers of Groupons

+ Improving training of employees and our internal management systems so that our customers and merchants can trust us sufficiently to do business.

Thank you for using Groupon. We hope to continue earning your trust in the future.

[Transcript of video begins here. You can listen to English.]

Thanks for posting this! I can actually read it. If you compare it to the google translate it's almost funny. Goes to show while natural language processing is definitely improving humans still are significantly better.

One of the most important and I guess up until now overlooked point is setting deal size limits in close collaboration with the merchants. For only they know honestly how many of the advertised deals can they deliver till it starts to affect the quality.

As for apologizing to the merchants, I am assuming that they must have known all the way along about how many orders were they capable of handling before they had to resort to delivering that what was not the same as the advertised deal.

:As for apologizing to the merchants, I am assuming that they must have known all the way along about how many orders were they capable of handling before they had to resort to delivering that what was not the same as the advertised deal.*

I think that assumption is perhaps optimistic. Your average local takeout place is not Toyota: they probably run things mostly on feel, rather than on having a rigorously documented and optimized process, and it is highly unlikely they've ever thought through capacity planning for "Can you take five times your busiest day ever? Can you take ten times your busiest day ever?", because for traditional businesses that just doesn't happen. Groupon's strategy for addressing this apparently includes communicating to merchants that Groupon is capable of overwhelming them past anything they have previously experienced.

I've heard a lot of people who are mad at the merchant and think it's their own fault for accepting so many orders. That may be true, but there is a huge conflict of interest for Groupon. They get a chunk of the money for each deal so I can only imagine hey push the merchant to offer as large a deal as possible. I would love to see how their sales staff operates. Groupon's interests are pretty aligned with the customer; they probably view merchants as upstream suppliers who need to be squeezed for maximum profit.

I've done quite a bit of business in Japan and in my opinion this is very well done. Well, there could have been more bows, and the word "apologize" could have appeared more often, but overall this was a sincere apology, which really counts.

When I started watching the video I was afraid of an insincere or an incomplete apology ("…and if anyone feels offended, we apologize…") which would be a complete disaster, especially coming from an American speaking in English.

"This restaurant has been optimized against the Slashdot effect."

Many businesses jump into offering deals on social buying sites without realizing the potential amount of customers it can get them. The truth is business owners should first of all make sure the deal is worth doing, since sometimes they end up losing money due to the huge amount of people that buy the deal. Besides, getting so many customers all at once, requires businesses to hire extra help, make sure they have enough stock of whatever they sell and basically be ready for handling a lot of people all at once without these disasters happening. I read a good article on what to take into consideration before jumping into offering a deal in sites like Groupon http://bit.ly/fd0B6E.

Watching this video, pretty much tells why Groupon is going so fast. This is the way one should treat his users.

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