Babson: Semester Two

25.01.12 | dataapplegoogleAmazoncloudcloud computingAlaska airlinesebscohbshbrharvard business schoolbabsonmba

I just started my second semester of graduate school at Babson. I waited until I was really ready to apply to an MBA program, until I wanted it only for me and not for my parents, for my employer, or for society. And now I have to say I love it. It feels like hope and education and fuel to me.

My econ professor apparently jokes that people go to HBS for the name and they come to Babson to learn. Still I derive joy from trolling the EBSCO database for pearls from HBR and I have to toot my own horn because HBR included a company I’d been thinking about while on holiday — Alaska Airlines (AA). I was fascinated by the fact that AA offers healthy food onboard and has its flight attendants collect all recyclables, which is more than I can say for Sir Richard Branson’s airline Virgin, despite the billionaire’s talk about fostering the search for renewable energy sources.

Alaska Airlines, though was mentioned in a different light in the Jan/Feb 2012 HBR piece entitled Creating Sustainable Performance, which notes that around 2000 AA was lagging so they decided to do something about. To oversimplify, they made the shocking decision to launch a plan that partially involved- wait for it - seeking input and suggestions from their employees and actually letting them act on those suggestions.

Today in class, though, one main message was that marketing is all about pleasing the customer and that marketing  = company strategy, apart from its various other definitions. But one point that came up that echoed one of last semester’s main messages was that one of the driving forces in big technology business these days is data. Amazon, Apple, and Google are all after consumer interests and we give up our consumer interests when we give them our virginity data.

Why I Don’t Want In On the Groupon IPO

18.09.11 | 28 notes | GrouponzyngafarmvilledataanalyticsBala IyerAmericansconsumerLinkedinsocial mediaROI

I didn’t try to buy LinkedIn shares and I don’t want Groupon stock if the company proceeds with an IPO. I’m not going to tell you about P/E and other valuation stats. I’m hoping to learn how to do that in time, as I’m attending Babson’s Evening MBA program. For now, I choose stocks based on their revenue stream(s) and potential to consistently lure American consumers.

• One Hit Wonder? I by no means am not appreciative of the major trend Groupon started but how many Groupon purchases turn into repeat business? Many articles have covered the fact that businesses take a hit with Groupon and lose money on the Groupon coupon because they are hoping to get new loyal customers. I’m guessing it rarely happens.

My experience with Groupon was limited but for a business my guess is it’s sort of like getting featured on Oprah’s “list” but minus all the real sales. You get that flood of business except the income doesn’t cover all of your costs. You’re scrambling to accommodate all the buyers and then because of the number of Groupons sold, you end up having to extend the expiration date. More appointments filled at a loss…

• Time is Money. Groupon rarely actually features spas and restaurants near my house or place of work, or that I regularly go to. I get it that that’s the point—to drive new business to other places. But the thing is, Americans are all about 1) savings & 2) convenience. Even the savings won’t be worth it for many if it means sacrificing time. 
• Buyer’s Remorse. I bought three Groupons. Two to a local semi-upscale restaurant thinking I’d use one and give one to my parents. They never used theirs. $20 bucks gone. Then I bought a $60 Groupon for a spa in Cambridge for a mani/pedi/massage. That spa got flooded with purchases, extended the expiration date, and ultimately we couldn’t find dates to fit both of our schedules, so they told me to request a refund. They were extremely patient and accommodating, so I will consider using them in the future, but the point is, the spa was outside my usual routes so it felt like I had to schedule extra time for travel. I know that seems a bit nit-picky but businesses need to know that Americans want it all for VERY little money! 
• The New Marketing Ploy. Would I have gone to the restaurant and spa had they not worked with Groupon? Eventually but not when I bought the Groupons. Meaning, this may be just a sophisticated way of luring customers. Like when I tell my friend, BR just gave you a coupon so you’d come back and buy more. But you don’t need more! Too bad, they are preaching to choir and I’m the bad friend saying don’t spend more. Well guess what, I bought into the Groupon sales pitch for a bit, but the honeymoon period has worn off and I’m no longer sold.

Ultimately I think Groupon is a great idea but with competition growing, I think they need more “deals.” The AP video has Founder Andrew Mason saying that the solution to overselling and overwhelming businesses using Groupon, which can then lead to sub-par ratings on sites like Yelp, is their planned neighborhood rollout, which would limit the number of people seeing specific deals. 

As for LinkedIn, social media is a necessary evil but its ROI is very hard to track. Where is Twitter storing the data? Their site often crashes and they are likely losing data to all the third-party companies that created free web-based Twitter management systems, such as CoTweet and TweetDeck. Following my recent Babson class, I now know these are data companies not just software companies. I guess I should ask, given my recent OB & IT class, how LinkedIn and Groupon are gathering user data and how they plan to profit from that data in the future?

I’ll close with this. When discussing gaming and social media, one of my professors, Bala Iyer, said this of Zynga (Farmville) : it’s an “analytics company manifesting as a gaming product.”