Brian Breslin's Blog

The other day Loopt announced it was starting “U-Deal” where the users can request a deal from individual businesses. Now don’t get me wrong, I like parts of this concept, and I have a hunch that there are going to be a number of people out there working on similar concepts.

So how does a reverse daily deal work?
You as the customer see a business you want a deal from. You then put up an offer of $10 for $20 of food. Enough people jump on your deal, and Loopt or whomever approaches the vendor and offers them the pre-sold deal. Sounds good right? Customers get a great deal, Loopt gets a cut, and businesses get cash and customers.

So why am I not sold on reverse daily deals?
My biggest fear with reverse daily deals is the possibility of the daily deal marketplace turning into a turkish bazaar. Once everything becomes negotiable online, vendors jobs become increasingly difficult. Imagine if you suddenly have the merging of flea markets and restaurants… not a pretty picture in my opinion. Furthermore, what happens to the confused customers who see the deals posted that the venue hasn’t approved or agreed to? Won’t these consumers get upset that Capital Grille isn’t honoring the $5 for $100 worth of food that 50 people “bought” on loopt?

So how can this model work and succeed?
First off, simplify the model, don’t make me invent a deal for you the broker, let me show my interest in a coupon or deal, and you and the restaurant work out the details. I wouldn’t trust the public to make anything other than 50% or 75% off deals. The most I’d attempt right now is letting people put deposits to get first dibs on a deal, at the very least you can use that cash as a carrot to potential vendors.

Now you know what I do like, what savored.com is trying with their model. Fairly simple, you pay $10 for a reservation at a restaurant, they tell you what times/days are available (think opentable + deals), and at the end of the meal, you get 33% off.

*note the Bazaar photo from above is of Tehran.

Much has been said this week about Groupon’s IPO plans, and the fact their financials are now exposed for us to see. Several people suggested that Groupon is a giant ponzi scheme, others suggested they were effectively insolvent, yet others have remained positive about the deal. Unfortunately for us, Groupon cannot answer directly to any of these questions as they are stuck in the SEC quiet period. So since everyone else seems to have an opinion, I figured I’d share mine.

So what do we know so far, Groupon has raised INSANE amounts of capital, this is very true. Groupon founders and early investors have already taken MILLIONS off the table, this is also true. They are burning more cash than they are bringing in, yeah, but wouldn’t be the first time a company has done this (especially internet startups).

The key things to look at are the following:

• They have 80 MILLION subscribers to their newsletters/offer emails.
• Only 20% of those subscribers have bought something.
• They have 56,000 merchants signed up.
• They have 8,000 employees
• Customer acquisition costs are rising.
• Per customer revenue is decreasing.

So what do we know, they have a TON of opportunity left in this tank. They have 64 Million subscribers who have yet to buy something. Why not? They need more offers, or better targeted offers. Well that’s why they have 8000 employees. These sales people can now go through the lists of merchants in their database and upsell them, push instant deals (Groupon Now) and other offers. They can also start recruiting more efficiently than before. I’d be shocked if they don’t hit 100k merchants by the end of the year.

Think of the ways they can leverage these customers:

• segmenting their list granularly (ultra targeting offers)
• expanding into loyalty programs (logical step)
• expansion into travel (via expedia deal)
• national deals with CPG companies (think vouchers for Tide at any store)
• time and product sensitive offers (push people at slow times to stores)

So why am I bullish on Groupon? I don’t look at the $1-2Billion they are making already (in gross), but rather the 10-15Billion they haven’t tapped yet. They admittedly have a smaller market than google, but I think they can be a $20B market cap company in a year or three. They could be easily making more money from their existing customers if they refine and improve their product. Including an incentive to the customer friends for referrals could also reduce their customer acquisition costs (they have the referral $5 now, but on a per deal basis could be further emphasized).

Pundits I’ve decided are largely short-sighted. You’d think after writing about the mobile industry for years and years, and the tech industry for just as long, they would start to get the bigger picture of things. Case in point: Apple announced iMessages as a key portion of its upcoming iOS 5. Many of the people covering this are saying how it will kill the carriers revenue from already overpriced SMS plans. Whoop-dee-doo.

These people are looking at it the wrong way. Smart carriers will be annoyed in the short term with Apple’s move (which was apparently news to them as well), but love it long term. So with iMessages you no longer will need to pay $10-15/month for an unlimited SMS plan, as you’ll be able to chat free with your iOS buddies (200Million of them worldwide by the way). You’re going to effectively be locked in to iOS the same way your wall street cousin was locked in to Blackberry Messenger for the last 10 years. Many, many, many people kept using and buying Blackberries SOLELY for BBM capabilities, those people now have a decent reason to quit and jump ship to iOS devices.

So the carrier sees you cancel your $10/month SMS plan, that sucks for them in the short term, but now that you’re locking yourself into a long term play with iPhone for iMessenger, you aren’t going to consider switching to a feature phone or even an Android next. So you’re going to keep paying that $30-40/month for your unlimited data. So $120/year from SMS (which realistically people won’t cancel SMS entirely, but will drop to cheaper plans, say $60/year) gone, but $360-480/year in data fees locked in. Not such a bad situation to be in for the carriers.

They could have been screwed by Apple much worse if Apple had been so inclined.

There was a ton of buzz around the Internet on Monday as Cisco casually announced they were shuttering Flip, the company they had acquired only 2 years ago for a princely sum of $590 Million. By Wednesday no one seemed to be talking about it anymore. Maybe because it doesn’t matter in the grand scheme of things. Now don’t get me wrong, it sucks that 500+ people will lose their jobs at Flip, but many of them if not all will find other positions fairly quickly with Cisco on their resume.

Many of the critics thought it was a colossal waste to just shutter the division and lay everyone off, but they are failing to see that the writing was already on the wall for Flip years ago. In my opinion, the founders of Flip and early investors got out while the going was good, kudos to them. To sell Flip would have meant a ton of hassles and headaches looking for a buyer; no buyer would have paid even close to $100M for the brand (forget the hardware tech). So after legal fees, you’re talking $66M MAYBE in revenue. Remember Cisco did 10B+ in sales last quarter. 1.6B in profit for the quarter. The tax benefits of writing off the investment far outweigh the revenue they could have netted on the deal.

So when did it start going south for Flip? First the iPhone added video with the 3GS (in early 2009, less than a year after being bought by Cisco). Boom goes the dynamite. Then every phone on the market added video. Oh and the ipod touch & nano both had video. Video just as good as the flip, in many cases better. Why on earth would you need or want to carry 2 devices?

While smart-phones and digital cameras were quickly replacing the functionality of the flip, flip stood there and didn’t innovate. Others like the gopro replaced their role in rugged video recording, situations where you wouldn’t want to risk your $300 smart-phone. Flip should have OWNED this space. They could easily have pivoted, beat gopro to market, and beat gopro on manufacturing costs and distribution.

Now I get why Cisco bought Flip originally, they thought they could own the bandwidth loop from end to end (start with bandwidth hogging creation – video, run it over their routers, and display via video conferencing devices). Who knows, maybe this was overly optimistic? Ultimately it tells us what: technology is evolving, so even if you buy today’s hot stuff, it might be tomorrow’s has been if you don’t continue to invest in it. Its also a cautionary tale in expanding into markets you don’t understand (shifting from purely business/networking to consumer electronics).

So does it even matter to you that the Flip is dead?

So I get a lot of requests for people looking to hire developers, and saying they can’t find any down here in South Florida. I figure let’s fix that.
If you are looking for a new job, please fill out the form below. If something comes across my desk that matches your skillset, I’ll forward you the contact. Eventually I’ll have a separate list for people looking to recruit as well. If you are a recruiter, please contact me brianbreslin [at] gmail.com

This past weekend I had the pleasure of giving a talk at the wildly successful WordCamp Miami (over 300 people!). My original plan was to show off our first month’s experience with PressBackup and how to launch a service around WordPress. We unfortunately didn’t have the data ready or lots to show as we’re still mid-soft-launch on it, and AppliedSEO wasn’t ready for launch either. So I pivoted my talk, and shifted to the opportunities available around WordPress.

There were two key themes to my talk: What are the pain points to solve, and what are the opportunities to be had in these areas. A key theme was to build SCALABLE businesses around the ecosystem, a point I want to keep harping on. I’ve embedded the slides below, but will summarize what I think are the key things we should all be looking at.

• Market Size: 40 Million+ WordPress powered blogs, 6% of all websites run WordPress.
• Ecosystem already in the 50+ Million range.
• WordPress.com premium themes could be a $10-20M business for theme developers in year 1
• There are still a number of pain points still present in market
  • Complexity
  • Security
  • Deployment/Management
  • Design
  • Functionality

I think any of these points can be solved and turned into a multi million a year business. Remember there are still MILLIONS of small business owners who don’t have a web presence and using WordPress would still be too hard (and too easy to break). People don’t want input boxes, they want to double click and edit in place.

Think these things over, let me know what you think, and I hope you enjoy the slides!

I get a ton of job requests for things web related due to my position in the community and more importantly my involvement in Refresh South Florida. Lots of times the requests come in for things I do, but am too busy, or the budget is too low, etc. Often times its for things I don’t specialize in, don’t know how to do, or just find other people better suited for them. So with that in mind, it occurred to me that I need to be able to quickly find and organize my friends and acquaintances based on what THEY want to do, what kinds of leads they are looking for, etc.

So I present to you “Brian’s freelance list”. Add your name, tell your friends about it, etc. This list is 100% free. If I give you a referral, I don’t expect a commission or fee. If you feel you’d like to show your appreciation, by all means, I won’t stop you. If you have comments on this, email me or post them below.

So just like a ton of other people, I am going to rant about why I’m skipping SXSW this year. This will be the first time since 2005 that I don’t make it out to SXSW, and I’m not really that heartbroken about it. In the 5 years I went, I met a lot of people, spoke on a panel at the event, and made lots of friendships that last to this day. The key thing I’ve gleaned from SXSW over the years has been the relationships. Being in South Florida, its hard to find a central meeting point for all my friends spread out across the globe, and Austin just so happens to be the easiest one.

So after all these years of going, why am I stopping this year? Well for one the price of getting there has skyrocketed. My first year I paid $150 for the ticket, now its $750. I paid $200 for my airfare that year as well, now the cheapest flights are $500. I paid $100/night for my hotel then, now, well there are no hotels at a reasonable distance. All in, it would probably cost me close to $2k just to visit Austin for a few days, and that doesn’t include my bar tabs. Sure I could probably crash on someone’s floor, or not get a SXSW pass, but getting into parties and such without the pass is a bit tough (not impossible though).

I miss the days when you could walk up to anyone and start chatting with them, and have them be someone whose blog you read or software you use, those days are largely gone. Now half the people there are sales reps for some new company trying to pitch you on their stuff. Sure they might give you a t-shirt, but its not the same as the personal connections.

What about the actual conference?
Well to be honest its tough to make a conference where speakers have to submit their topics in JULY the year before. Lots of stuff I could talk about in July 2010 might not be relevant anymore in March 2011. I don’t blame the organizers for this, because its tough to schedule 300 sessions out of 3000 submissions without tons of lead time. To be honest its been a while since I went to a panel and was truly inspired or learned something new.

Ultimately though, its the lines. As a person who abhors waiting in lines (I won’t go to a club if I have to wait more than 5 minutes to get in), I can’t fathom a party being fun if there are 300 people waiting in line to get in. So I guess SXSW has gotten too big for me to enjoy it anymore. I’ll be spending my two grand on something like going snowboarding or learning to surf this year.

I guess the signal to noise ratio is too high for me. :-/