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Social Network Background Check » Entries tagged with "Rocky Agrawal"

What Andrew Mason’s departure means for Groupon

March 5th, 2013 | Add a Comment

A new chapter in Groupon history began last week with the ouster of Groupon CEO Andrew Mason. After a devastating earnings report on Wednesday, Mason was ousted by the board on Thursday. As Groupon’s most vocal critic (disclosure: I’m short Groupon), I wanted to take a look at what changes we might see and the state of the business today. Unlike many of my previous posts, this will contain little advice for the company. The biggest change I expect to see — and one that Mason’s departure from the company signifies — is the elimination of the wide disconnect between reality and management’s claims about the state of the business. While Groupon’s stock was tanking 26% in after-hours trading, Mason was telling investors and analysts on the earnings call, “We’re quite proud of these numbers.” At the … Read entire article »

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Virgin America CEO navigates turbulent skies

November 17th, 2012 | Add a Comment

The media has had some doom and gloom stories surrounding Virgin America, Silicon Valley’s startup airline, recently. Time wondered if the airline was like a TV show that was a hit with critics but was facing cancellation. Bloomberg quoted an analyst who said the airline would need a “major restructuring” in order to survive. “We obviously don’t agree with that,” David Cush, the airline’s CEO told me in an interview. “Not only are we not in danger, we’re projecting a profit for the fourth quarter.” The airline reported an operating profit for the third quarter with an operating margin of 4.3%. The airline also announced that it is scaling back its aircraft options with Airbus. On a cash basis, the airline had less cash at the end of 3Q than at the … Read entire article »

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Learning from a failed IPO

November 9th, 2012 | Add a Comment

Shortly after the company’s IPO, the stock tanked. Marketing costs were threatening the very existence of the company. Wall Street had pretty much written it off. That sounds a lot like the story of Groupon. After missing earnings yesterday, the company is down close to 25% today. It’s trading roughly 85% below its offering price of $20 one year ago. (Disclosure: I’m short Groupon.) But the story I’m talking about today is that of Varsity Books, a high flier in the first dot-com boom. It went public shortly before the bubble burst and crashed along with the rest of the Internet sector. I had a chance to talk with co-founder Eric Kuhn earlier this year. Varsity Books sold textbooks to college students, presenting one of the first challenges to college bookstores. “We heavily discounted, … Read entire article »

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Why Groupon Now won’t work

May 10th, 2012 | Add a Comment

Disclaimer: Rocky Agrawal holds a variety of short positions in Groupon. You can find a full list of his disclosures here and in his author bio.  In Andrew Mason’s recent letter to shareholders and in a press release touting 1.5 million Groupon Now deals sold, Groupon has been highlighting the product as an example of innovation and a potential positive for the beleaguered company. Groupon shareholders should hope that the company has more interesting things up its sleeves, because Groupon Now isn’t going to save this company. Groupon’s external enthusiasm for Groupon Now seems to conflict with some internal views. “They moved a bunch of low performing sales people to Now! a few months before it launched and they hired a bunch of people too,” a former Groupon salesperson told me. “I believe as Now! proved to make no money, they moved back a bunch … Read entire article »

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What does all the bad press mean for Groupon?

April 8th, 2012 | Add a Comment

Groupon faced a deluge of bad press and unfavorable comparisons this week following its accounting restatement on March 30. This morning, I searched for Groupon and got this on Google News: Notice that Google News algorithms put the Enron logo next to a story about Groupon. I think I’ve made the Groupon and Enron comparison myself. In both cases, you had high-flying companies that focused on short-term growth while ignoring the underlying risks of what they were creating. Delving in to Google News this morning, I found story after story of bad news about Groupon. From The Los Angeles Times: Five months after going public with much fanfare, daily deals site Groupon Inc. is facing fresh doubts on several fronts concerning its credibility and long-term viability. Time wrote: Groupon’s headaches are growing more serious. Just days after an accounting snafu … Read entire article »

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Why Groupon is poised for collapse

April 1st, 2012 | Add a Comment

Groupon was forced to restate fourth quarter earnings, sending its stock down 6% in after-hours trading. This surprised me as much as my $2 investment in the Mega Millions jackpot not paying off. The reasons for Groupon’s restatement were higher refund reserves and weakness in internal controls. These are issues I’ve repeatedly discussed. I raised them directly with Groupon PR in September (back when they still would speak to me) and I was assured that refunds weren’t an issue for Groupon. I also spoke with a former Groupon salesperson who claimed he was fired because he raised concerns about poor internal systems that didn’t track deals correctly and complaints about poor risk management when it comes to running deals. So what’s happening at the coupon company? Well, for starters, it’s not a coupon company … Read entire article »

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Paypal faces a crowded fray in mobile payments (infographic)

March 15th, 2012 | Add a Comment

PayPal announced today that it would be entering the mobile payment market with its own smartphone dongle, PayPal Here. It’s a triangular widget that plugs into the headphone jack of your phone, just like its prominent startup competitor, Square. PayPal’s entrance into this market is no surprise, but the Dunder Mifflin-like nature of today’s press conference was a little awkward. Still, as VentureBeat contributor Rocky Agrawal explains, PayPal Here is a credible competitor to Square. But it’s a crowded market full of challenges. Indeed, there are many ways of taking your money on the go already: wireless point-of-sale systems like Paypal Here and Square (you swipe your card through a card reader attached to the merchant’s smartphone or tablet), contactless payment systems like Google Wallet and Isis (your smartphone becomes your wallet, and you tap … Read entire article »

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How to pitch your startup at conferences

March 9th, 2012 | Add a Comment

I attended the Launch conference in San Francisco yesterday and saw quite a few pitches. Unfortunately, many entrepreneurs are still making the same mistakes they’ve been making for years. Here are a few tips for pitching. Because many of the presenters were first timers and early stage companies, I’m not going to name names of companies that I thought did poorly. My goal is to help companies improve. Booth Have a sign! You’re competing with dozens of other startups for attention. People aren’t going to stop and talk to everyone. You’ve already invested money for the booth space and the people to be on site. Spend the money to get a decent sign that talks about what your company does in a few bullet points. See the example at right for a good … Read entire article »

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11 tips for entrepreneurs on dealing with the press

March 5th, 2012 | Add a Comment

Chris Dixon has one of the best posts I’ve seen on how startups should deal with the press. I added a few items in his comments, but thought they were worthy of sharing here. I sit in a weird spot: although many consider me to be press, I also talk to a lot of other media outlets. I’m often quoted in national newspapers and magazines and regularly appear on TV. This happens partly because I have something interesting to stay; it’s also partly because I treat people how I like to be treated. Here are my top tips for dealing with the press (including me): Learn about the news outlet and the specific person you’re approaching. Every outlet has a specific feel and each person with an outlet has their own coverage area, … Read entire article »

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When marketers create their own content, what can you charge them for?

February 29th, 2012 | Add a Comment

As more advertising dollars move online, publishers and marketers are finding themselves in a new world. We’re moving from scarcity of information and distribution to abundance. Take Yellow Pages. In the scarcity model, a free listing was a name and a phone number in tiny type. Publishers could charge for things like bold face listings, a color headline, a box around your listing, photos, a tagline about your business, and additional text such as hours of operation. With the abundance model, publishers like Yelp and Google give away many of these kinds of  features with the expectation that providing better information for consumers will draw more visitors. Businesses can upload photos and hours and describe some of their key features — all for free. Google even goes so far as to pay for … Read entire article »

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