Suneel Gupta on What’s up with Groupon

It seems like Groupon has really changed, doesn’t it?!  Today’s interview includes some of the back story behind the company’s evolution from a social deal-of-the-day offering to an engine of local commerce.  I talk with Suneel Gupta, Groupon’s first ever product leader.  Suneel helps us understand what Groupon is trying to become, why, and how.

Check it out:

Suneel is a really fascinating guy.  He’s built products for Mozilla Labs, blogged for MTV, developed television concepts for Sony Pictures, led trade efforts in Ghana, wrote speeches in President Clinton’s West Wing, and produced the Kahani Movement, an interactive film project with his brother, Dr. Sanjay Gupta (CNN), which debuted at South by Southwest.  You can connect with him on Twitter at @suneel.

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Today’s interview is for all of you who are wondering, what’s up at Groupon?  I’ll be speaking with Suneel Gupta who was Groupon’s first head of product. He’ll be talking about the transformation that Groupon is undertaking, and some of the challenges and opportunities along the way.

A few things to know about Suneel before we get started. He loves to build stuff from scratch. Prior to Groupon he built products from Mozilla labs, he blogs MTV, developed television concepts for Sony Pictures, led trade efforts in Ghana, wrote speeches for Clinton’s West Wing, and produced the Kahani movement an interactive film project which debuted at South by Southwest and which he presented at TedX San Diego last year, where we met. So welcome Suneel.

Suneel Gupta: Thank you, good to be here.

Denise: I want to jump right into it and ask you, what the heck is going at on Groupon? It seems like you all are trying to evolve from being kind of a social deal of the day offering, to a real engine of local commerce. So, what’s up with that, and why are you making this transformation?

Suneel: Yeah, I mean, I think if you look back to the beginning of Groupon and what we wanted to be, I think that, if you listen to Andrew speak. Andrew Manson, our CEO speak, and if you, I certainly, during the conversations I’ve had with him, when I was a project manager at Mozilla at the time, when him and I met. My wife Magnus had me move across the country from San Francisco to Chicago, to come join Andrew on this mission.

We wouldn’t have done that if the final vision was just to be a daily deal site. I know that is how some people, a lot of folks sort of, that’s the brand we’ve sorted of adopted, but that was never the end goal, and it still isn’t the end goal.  The end goal is in a lot of ways to be, sort of fuel the ecosystem, of local, and fuel the systems of e-commerce.

I think that in doing so; we always have a long standing goal of just in general making life less boring. The way we can do that is by introducing you to new experiences. The question is how do we get there, what is the path? I think that, you know that having this daily deal model, helped solved one very, very specific problem for local merchants.

If you wanted to share your business with lots and lots of people, and you wanted to get new customers, the paths that you had, the tools that you had to do that were sort of in a lot of ways high maintenance, television, radio.  One of the things we hear when we talk to merchants, to local businesses, and over my time here at Groupon, I’ve probably talked to at least few hundred from all around the world.

Every local business is different, but one thing that you always hear, and the common thread you almost hear from every small business owner, is that they got into doing what they do because there is some craft that they love, that they enjoyed. They love to cook, they love to bake, and they love to sew. They got into their business for that reason.

Usually what you don’t hear is that they got into their business because they enjoy customer acquisition, or they enjoy the game of loyalty, or they enjoy sort of trying to figure out, how to advertise most effectively. Usually those things are just necessary evils, and so I think that the idea of being able to acquire thousands of new customers quickly, was something that is very, very appealing to merchants, and to our community, and I think that was sort of the beginning.

But the challenges that lay ahead are in a lot of ways complex and I think the key to sort of taking our business and taking the industry to the next level, which is, now that they’ve come to your business, number one; how do you get them coming in at the right time? So as airline, airlines have always, or hotels have always been really good at, sort of perfectly matching supply with demands. They know how to play the yield management curve, to drop price at the right, to increase the price at the right times. They have sophisticated teams that are working on that, based on the data. If you’re a small business, and you don’t have those tools available to you, you know, it’s hard, hard to sort of compete in a lot of ways, and it’s hard to sort of take advantage of some of the opportunities that, you know those tools can provide.

So what if I could get you to come in to come in to a restaurant at 3:00, on a Wednesday, when you have, you know, very, very slow business, and yet you’re still this small business owner paying a lot for over-head. Those are the kind of tools that I think we need to do to get people, sort of in the door at the right time.

The other piece is really getting them to come back, and we know that people who purchased Groupons, do return back to the business, but I think it’s a matter of getting that data into the merchants hand, and making sure they have, you know, full use of who these people are and you know, why they are returning, and why they are not returning. So that makes you as a business owner, a better business owner.

Closing that loop, I think is also really critical. I think that if we can solve those pieces, you know, we’ve not only taken our business to another level, but I think that in a lot of ways we’ve solved that, a complete suite of problems, that every small business owner faces. Really that’s, what I think we really stand for and have stood for from the very beginning.

Denise: That seems like quiet a big step from maybe, like you said, what people perceive you as today. And so, how do you ensure that your customer’s, and I guess, maybe I should ask about both merchants as well as consumers, how do you ensure that these groups really understand the full value that you’re offering here, that it’s not just about a single kind of transaction based deal?

Suneel: I think the thing that I, we want our customers to think about, and we want our customers to think about us when their planning the experience, it doesn’t matter if that experience is a restaurant with your loved one, or if it’s a weekend out to a destination, you want to take a road trip with your kids. Whatever it is, we want you to think about Groupon first. We want you to understand what our offerings are.

We are evolving the experience to sort of notch that in a lot of ways. You know, anytime you’re planning an event or planning a weekend out, we want that to be the destination, and if you can come to us and we can always have the promise, or fulfill the promise that we’ve going to have something for you to do, we’re going to have something cool, to offer you. Then I think that’s the value, that’s what I think we stand for to our customers.

To merchants, I think it’s the same thing, you know look, I mean, if have excess supply or if you have, you know a restaurant that you want to get off the ground, you’re looking for new customers, you’re looking for, you know, more regulars. There’s an opportunity for you to always have sort of your inventory in our ecosystem, and we can match that inventory to the right customers. A key piece of making that happening is really by making the experience more personal, and one of the things I’ve been working a lot on at Groupon over the past few years is personalization. Just making it so that, you know, that people are getting the right types of offers.

Personalization is always a little bit tricky in our world, because we want to introduce you to new things. Unlike Netflix’s or Amazon, where you can sort of say I’m a history buff, or I like documentaries, and continue to get that same sort of type of offer, over and over again. We want things to be a little bit different, just because you enjoy steak dinners or sushi dinners, I don’t want to continue to give you that offer over and over again, that’s just a boring service. I want to make sure that I’m exposing you to new things, so being personal, but at the same time being relevant at being personal, being relevant, but also being serendipitous.

Denise: Wow. Well, I’m sure along this journey something’s have gone really well, and something’s have been more of a challenge, and so, do you have an example of something that you pursued or like a new development that’s really kind of stretched Groupon? What have you learned from experiences of kind of sticking your neck out and doing something that was a big risk?

Suneel: Yeah, you know, I think our getaway’s business, our travel business in a lot of ways was risky, just because there are business out there that are basically trying to do something meaningful in the travel space, but I think, that you know, what you see in the travel and the environment is that you have these online travel agencies you know the big folks in the pond. You’re talking about the Expedia’s and the Hot Wire’s and Travelocity, that are owning huge chunks of that space, and are owning relationships with hotels all around the world. So, it’s tough to sort of make a dent.

Because travel wasn’t really our domain, we weren’t 100 percent sure how we would actually approach that. One of the ways that we actually did end up approaching it, it actually partnering with Expedia, which was helpful in a lot of ways, because we got a lot of their domain expertise. In a lot of ways a product owner is somebody, who is trying to work with a team of talented engineers to develop something new, develop a new product. That was definitely different, because, you know, if you look at what our business sort of stood for, it was getting people out into their sort of own backyards, and their own neighborhoods, experiencing these things.

Now, you have this travel concept, where the idea ties nicely I think, which is like, you know, we want you to experience local, but local doesn’t always have to  be in your back yard, it can be in someone else’s back yard, it can be in the destination. The idea being like, I want you to be able not only get a hotel in Paris, but I want you to also have three or four things to do in Paris, all of which are, you know, at an incredible discount, an unbeatable discount.

I think that if we can accomplish that, we may be, I think the only business in the world today that does that effectively. I think others have tried, but if you look at the other offerings, what we have is, you know, we have, you’ll buy something on an online travel agency, like Expedia and you’ll buy a hotel in Paris, and all of a sudden you’ll get a deal to maybe go tour the Eiffel Tower, or take a bus ride around the city.

What you won’t necessary get is that local wine and cheese shop down the street, or that couple massage, or the local vineyard that only the locals sort of go to, because it’s kind of hidden away. Those are things, that are special and that’s really what I think unlocks the cities potential. So I think if we can do that, not only do we stay true to our brand, but we offer something new. Getting back to your original question, that’s defiantly a challenge.  This isn’t necessarily our domain, its uncharted territory for us, but we, it’s something we feel it’s super important.

Denise: So, I think as you talked about, one of the things, is like in partnering with Expedia, who does have that domain expertise, and leveraging what they know and what you know, in creating this new offering, it seems really smart, and probably kind of more of the model, of how companies like yours will need to be going forward in the future, don’t necessary build everything yourself, but really actually engage partners and do alliances, that help you build this integrated value proposition, really?

Suneel: Right. Sure.

Denise: Which kind of leads me to, my last question.  As you work with these partners and as you acquire new companies, how do you ensure that the people who are working on your business, whether it be your employees or your partners. How do you ensure that they understand your vision and kind of where you’re going?

Suneel: Well, I think that’s a really good question, and you know, and it’s, I think it’s were you see sometimes acquisitions go wrong. It that you’re applying for a certain talent, or apply for a certain product, you know, there’s something special about this acquisition that you think is going to make your business better. But the question is, how aligned, to me I think at Groupon and I think at other companies, that you know, duel for example; you set a high bar for the people you bring on.  Not just in terms of talent, but also culture.

Like in terms of cultural fit, and I think it’s important, that sort of those same values, that same bar is applied for any type of acquisition, because ultimately you’re not just acquiring the resources of that company, but you’re acquiring the people, you’re acquiring the certain personalities. I think that everybody needs to be in line. That’s one thing; second of all, I think that, because there is a, sort of a mission in the company, to really just make life less boring and to help people discover new things. That art of this discovery, I think is a big enough space, where we find a lot of start-ups that share that passion, and it’s awesome, it’s awesome to see.

You talk to founders who have been trying to go at it, but have been trying to go at it in their own way, you know, we bought a product called Bread Crumb, not too long ago. Based in New York, and their founder Seth, is just this amazing guy, who wanted to solve the problems, of places like restaurants, that need to use, these are archaic systems that basically records your order. If you ordered dinner, if you ordered drinks, these are our archaic systems that they need to navigate through.

He built a much more sophisticated sort of way to do that, but also a much simpler way of doing that, via iPad service. If you talk to Seth though, like his mission, the reason that he decided to start out with this business, was really just because he wanted to improve the way we go out, the way the that we enjoy physically experiences in our own neighborhoods. That’s what we believe in as well.

I guess what makes it the acquisition side of it the hiring side, what makes it awesome, is there is this whole body of people that share our mission. There’s this whole body of people that share our passion, and that makes for getting culturally aligned a lot easier.

Denise: Neat. Suneel, this has been great, thank you so much for our conversation. For my listeners, you can connect with Suneel on twitter, his handle is simply @Suneel. Thanks Suneel for giving us a little bit of a peak behind the curtain behind Groupon.

(transcript by Speechpad)

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