Earlier this month, Groupon reported its Q3 financials and announced that it has a new CEO. Rich Williams stepped into the role as Eric Lefkofsky stepped down to return to his role as Chairman of the Board.
Wall Street was not impressed with the news as shares plummeted as much as 26% in after-hours trading that day. In addition to the leadership, Groupon had missed forecasts.
Williams believes the company is greatly misunderstood by the media, by analysts, and by consumers. He says Groupon is still paying the price for pas mistakes such as scaling “too far” and “too fast”.
He also says some “myths” about the company have been built up over the years, and he aims to dispel those in a new blog post.
One myth, he says, is that nobody can win in the local space, and he says that Groupon is the “unquestioned leader”.
“On more than one occasion, we’ve been overly enthusiastic about the potential impact of new products, and we’ve been wrong more than once with how critical it is for us to compete in certain areas,” Williams writes. “We shouldn’t run from those failures or apologize for them. None of them bet the future of the company. We are pioneering, we are growing, and we are the market leader, which means we know that not every test will come out beaming rainbows and unicorns. Sometimes we will fail, and sometimes we will win, and win big. Winning big is absolutely possible in local. It’s a massive space that remains largely underserved. Consumers and merchants ultimately want that to change, and that makes winning in local possible. We have sold nearly a billion Groupons life to date. Add to that our nearly 50 million active consumer and 1 million merchant customers to date and you have a lot of proof of the possibilities in local.”
Another myth, he says, is that the company isn’t growing and that it’s going out of business. He calls this logic “lazy,” and notes that Groupon has grown billings and revenue by over 90% since going public with seven consecutive quarters of double-digit billings growth in North America. They’ve also doubled their customers in the past five years, he says, adding that the number of deals available has grown by 500x since the IPO.
Back in the early days, there were a lot of reports in the media that people were finding Groupon to actually be bad for business. This is another of the myths he says, adding that they don’t hear about that one much anymore. Now, he says, the top complaint is that people just want to sell more Groupons.
The biggest myth of all, however, according to Williams, is that Groupon is an email daily deal company, when the reality, he says, is that Groupon is a marketplace, and more people get deals from searching on its website than they do from email. More than half of purchases, he says, occur on mobile.
“Second, the ‘deals are dead’ line of thinking is tired and not supported,” he says. “Deals are core to who we are as a company, and we’re not running away from them–not by a long shot. Deals have helped us build the largest transactional platform of its kind in dozens of countries around the globe and a loved brand. We also know that there’s more to our marketplace than deals, including an increasing number of market rate and low discount offers, and new ways to save time as well as money. They’re just in their early stages and we want to move faster to bring them to customers so that they can see clearly the changes for themselves. We’re going to do that, and fast.”
After the myth-busting portion of the blog post, he gets into why he thinks Groupon has what it takes to win. He says it in many, many more words, but this basically boils down to Groupon’s team, customers, a strong business model, and experience.
He also outlines some strategic companies the company is making including a shift in marketing geared toward driving people to the marketplace.
The company will be adjusting its international strategy as well. It will shut down in some countries, partner in others, and increase investments in countries where it’s doing better.
Groupon will also no longer emphasize the consumer electronics business.
Image via Groupon