Nice infographic on where small businesses spend money from American Express OPEN Forum. It's the people. You want to make money you have to manage your salary expense. No two ways about it.
http://www.openforum.com/articles/infographic-how-small-businesses-spend-their-money
Excellent article on how to stop working at a big company and start being an entrepreneur by Daniel Tenner. The cliff notes version.
At the end of his post Daniel states that he hopes it helps someone. Well he helped me with these words:
Post something to your blog every day, no matter how short. Don't worry about people thinking you're stupid: no one will read your blog anyway.
One of the things we try to do at Half Off Depot is make our deals work for local businesses so that they will come back and do deals with us again and again. Sometimes this concept is a bit hard to explain. The folks over at The Dealmix put together a nice infographic on the subject.
Hat tip to Scott Rocher.
VentureBeat reported today that Fab just closed a $40 million round led by Andreessen Horowitz. Fab is an oft talked about company in the halls of Half Off Depot. Before today I do not know about the company's pivot from a social network for gay men. Interesting.
In Fab's announcement they attributed their success to three things.
(1) A laser-like focus on design. From the design aesthetic of Fab.com’s website and mobile applications, to the products that are featured for sale, to the end-to-end customer experience, Fab.com is all about good design.
(2) Social commerce. More than 50% of Fab.com’s 1.2 million members have come from social sharing.
(3) Innovation. Fab.com builds all of its own technology and is the world’s pioneer in integrating social and commerce features to enhance the product discovery process.
Focus, social, and innovation.
Perhaps a road map for success.
So one of my coworkers walked up to me the other day, evidently after perusing my social stream.
He: "Man you need a handler."
Me: "I think I can handle myself pretty well."
Which lead to a nice long discussion about the role of social and my role at Half Off Depot. The reality is, at the moment I am very much the voice of Half Off Depot. If I could only get DeShong to write something it would change things a little bit. Get the team to tweet and book more. We actually have some plans to extend our social activities and executive exposure beyond me to Patrick Best one of our cofounders and Brian Conley our CEO.
But somebody to handle me? I don't think so. I know enough about this stuff to stay between the guardrails.
I get the question every week, perhaps at least once a day. "What do you think of the Groupon IPO? That's good for you guys, right?"
To which I reply a hearty "maybe."
For those of you that have no idea what I am talking about Groupon, the biggest competitor to Half Off Depot where I currently work, went public on November 4. Groupon raised $700 million at a $12 billion valuation. That sandwiches it right between Google and Webvan as the largest IPOs in term of valuation. Interesting company to keep. I considered the Groupon IPO pricing to be a little expensive. Unlike Amazon, a much lower initial value company where I made a nice penny, I wouldn't touch it.
What do I know. The stock was priced at $20, and rose 31% on it's first day. Since then it's been in a slow drift downward. I expect that trend to continue for some time until it gets below the offer price. None of that will stop a bunch of 20 somethings celebrating the end of the lockup period at Kincade's, Sheffield's or wherever 20 somethings go to party in Chicago these days.
But back to the question is it good for Half Off Depot.
One of the things about running through the IPO process is that it generates a lot of general mass media attention. Most of the attention about Groupon was negative. Merchants don't like deals, there is no way Groupon makes money, management is blundering the IPO process. This created a generally negative sentiment around the deal space, one that is going to take a little time to overcome. We have time. And money. A lot of companies do not. They are going to go away soon. Less competition is good for Half Off Depot.
The Groupon IPO also demonstrated that investors see value in the deal space. The mishandling of the IPO process is a little problematic. Groupon got through it, they got out. But along the way questions were asked by investors that have yet to be answered. Until those questions are answered it is going to be difficult for other companies in the space to raise additional capital. Those that do are going to have to be able to clearly articulate why they are different and have a demonstrable money making model with some leverage. If Half Off Depot can do the former and show the latter, and I think we can, the Groupon IPO validated a market where we can play. Having a validated market to participate is good for Half Off Depot.
So the short answer is the Groupon IPO is good for Half Off Depot as it will make it harder for smaller underfunded companies to remain viable and they validated the market in which we participate.
All we have to do is execute on that different money making part. That will keep us busy for awhile.
Courtesy of Alexis Madrigal.
When I joined Half Off Depot back in May I started looking around for a competitive target. Not the 800 pound gorilla Groupon LivingSocial type of competitive target. A smaller yet significant company that we could set our sights on. That company was BuyWithMe.
As best as I could tell BuyWithMe was the number three player at the time. Founded in Boston, based out of NYC, BuyWithMe was actviely operating in a dozen or so major markets. They had raised $21.5 million from Matrix Capital and Bain Capital. The kind of number that makes our $7 million seem small.
And BuyWithMe was on a tear. The online deal market is going to consolidate and BuyWithMe was playing the role of consolidator, something that I would like to do. In 2011 they acquired six competitors, the most recent being in September. Then the wheels fell off.
Just six weeks after its last acquistion BuyWithMe choked on them. BuyWithMe laid off half its workforce after reportedly failing to close a new round at a $500 million valuation. It was reported to be looking for a buyer.
That buyer was Gilt Groupe, who purchased the assets of BuyWithMe. Asset purchases are rarely good for the selling entity. Gilt did not hire many of the BuyWithMe staff. The purchase price was about $5 million in cash and stock. Somebody pulled the plug.
Bang.
So October turned out to be another record month for Half Off Depot. Our more established markets showed some nice growth and our expansion markets came up to speed nicely, most of them exceeding rather aggressive growth plans.
But this week I had to let two people go. That's always tough to do. Hard saddening decisions. Every time a team member fails to perform to expectation disappointment abounds. While I am sure the folks departing will rebound nicely it is a major life occurrence. Something that they will always remember. It is something that I will always remember as well. Because regardless of the reason when somebody does not perform to expectation it is always a bit the fault of leadership. You hired the wrong person, did not manage them well, or did not provide them with the attention and support they needed to succeed. It hurts.
But in a startup people really do need to make their own way. They have to figure it out. There is not a lot of time for counseling or nurturing.
As a leader you have to do what is best for the company. Startups are leaving breathing things. For a startup the size of Half Off letting go two people is akin to cutting off 4% of your body. It's like losing the use of a hand or a foot. But it will heal. The scars will go away. We will be stronger for the challenge.
And it sets the proper tone. Performance matters.
So I was interviewing someone the other day. They had read FoG as part of their prep. They told me it was random, which kinda seemed that way in and of itself.
Perhaps it is. I don't know. Often times I appear that way myself. But I am really not. There is a reason for this perception.
Deep dark secret. One of my biggest improvement areas is communications. Two reasons for this.
One. I think fast and just assume others do as well. I don't communicate ABCDEFG. I communicate ACEG. I expect people to fill in the blanks. Those that do get along with me really well. People even talk back to me that way. It's friggin awesome when that happens.
Two. I tack. Like a captain in a sailboat against a headwind, I know where I am going but my thoughts go a little in different directions to get there. And that really does seem random.
Just like my blog I suppose.
