6 ms·

Loopt Tries a Groupon in Reverse

100 points by sama 15y ago

dot 15y ago
sounds like a good idea in theory, but the reason some businesses tend to like groupon is that it brings NEW customers in the door. it's a marketing platform and businesses know that can be expensive. 50% is a lot to pay for a customer rewards program.
- sama 15y ago
  our hope here is that this will bring a higher quality set of new customers in the door. word of mouth referrals tend to be pretty good. if i create a deal at a place and share it with my friends to get critical mass, that may be a better crowd that a daily deal email list.
  - geofflewis 15y ago
    But given a deal is contingent on your salesforce convincing the merchant to work with you (on a very tight timeframe / compressed sales cycle), doesn't this mean that by definition, most of the deals desired by users will not come to fruition? Won't this result in a poor experience for the majority of users?
greencircle 15y ago
It sounds like blackmail. I'd be just as embarrassed using Loopt as I would be using Groupon.
- StavrosK 15y ago
  I don't understand, how is it blackmail? It sounds useless to the store owner, because people basically say "I want cheaper things, give them to me", but it doesn't sound at all like blackmail.
gigawatt 15y ago
Taking the immediate gratification away from the consumer and giving it to the business, combined with surprise credit card charges, makes this pretty unappealing. At least to me, as a consumer.
Hovertruck 15y ago
Honest question... Does anyone on HN use Loopt? I've tried it a few times over the years and it never really comes to close to making me want to continue using it.
- loumf 15y ago
  I tried, but it was before iPhone had any kind of push notifications, live in a low population area, not a lot of my friends are early-adopter social tech types, and I'm too old to want to hang out with random people I saw on Loopt -- so, it didn't work for me. I'd be willing to give it another try. Interestingly, in the meantime, there was a lot of foursquare adoption among friends and in the area -- enough to get network effect benefit. I don't think many of my friends have heard of Loopt.
- rdl 15y ago
  I tried it, but found it slightly less compelling than Foursquare or FB Places (which I tried for a month of solid use); none of these services really hold my interest. The only thing I am interested in is where my actual friends are looking at doing things in the next 0-8 hours, not where people I know from facebook are during the day. Google Latitude actually does a better job of this for me than any other service I've tried, but it's still basically useless. Checkins were marginally useful to me in seeing where I ate lunch each day. Looking at things retrospectively was the most interesting use, and turned out to be somewhat depressing (home, gas, office, lunch across the street, office, fry's, office, datacenter, home, repeat indefinitely).
- cemregr 15y ago
  Haven't seen any Loopt activity on my social networks for a long time now. Are they in the deadpool?
gigantor 15y ago
Too much time between the request and delivery. There needs to be some sort of instant gratification for this to fly, otherwise it's essentially asking users to do free market research. Profit sharing with the users should the deal come into fruition would certainly inspire them to continue populating the merchant database.
nhashem 15y ago
While it's a theoretically cool concept, the actual implementation doesn't appeal that much to me as a consumer and I'm not sure it'll really appeal to businesses. Would I want to get $20 at a nearby pizza place for $10? Sure. But how useful is it if I have to wait an indeterminate amount of time (if ever) to get the deal? I'm likely to only suggest local businesses that I frequent a lot anyway, and how useful is it to them to offer discounts to mostly regularly paying customers? That being said, I do think this is moving the industry in a direction for variable prices for local businesses. Imagine a real-time feedback loop where it's 4pm and you could ask your local pizza place for a discount and they could instantly reply whether they granted it or not. It's a lull before dinner and they have some pizzas from lunch they've just kept warming up, so they grant you the discount. Or actually a kids' soccer team shows up and takes over the place so they decline the discount. This doesn't work so well with resellers (which is pretty much any restaurant), but it could definitely work with service businesses that have to pay their staff whether clients show up or not. We'll see if companies like Loopt have this vision in mind and whether they can make it possible.
- deleted 15y ago
  [deleted]
- patio11 15y ago
  A friend of mine has a company in Japan which pretty much solved this. Solution: big digital billboard in mall which aggregates tweets from mall merchants. If nobody is getting their hair cut, they tweet "$5 off for next person at Cheap Cuts" from cell phone. Merchants/mall apparently think it is a gift from God.
  - yaix 15y ago
    Simple and useful. Good idea.
  - stcredzero 15y ago
    Solution: big digital billboard in mall which aggregates tweets from mall merchants. A virtual billboard in the form of a smartphone app might be preferable in different kinds of public spaces. It might also be a good adjunct to the digital billboard.
agscala 15y ago
Good idea, but u-Deals is a dumb name.
patio11 15y ago
That seems strictly inferior to Groupon: it cannibalizes existing customers by design, but to get there, you need to nondeterministicly charge people's credit cards. So it is a reward card, with the restaurant paying 50% of reward values to, um, not reward their customers except weeks after the fact some of the time.
revorad 15y ago
This sounds like enabling haggling in markets where traditionally it hasn't been done (even in Asia where haggling over price for any product is quite common). If I say I will go to a restaurant on the condition that I get a 50% discount, I'm probably not going to spend much more there or go back again without a discount. Not sure this is a winner for businesses.
badusername 15y ago
Hmm, I request a deal from a business nearby. I am already there physically, but I don't get anything at that time, for all the effort I've put into getting there. I have moved on, it is three months later - I might be in a different country for all you know - and voila, a credit card transaction tells me that I've purchased some deal that I probably have no longer any interest in. Seems like it could have worked in 1980, but for today, I see gaping holes in user experience.
ssozuer 15y ago
It sounds good that using loopt to search some kind of stuff which you need it instantly(like cafe,bar..) in a local place you are not familiar, rather than using it like Groupon's vision. The most importantly, local markets should feed back the system instantly and people can make proper decisions at that moment. I think, mainly idea is cool.
rdl 15y ago
I think this is interesting -- I'd probably use it in high density areas with lots of options, only. For instance, there are ~50 restaurants in Castro St in Mountain View. I've been to 15. I'd like to try about 20 of the others, so signing up for all of those would make sense. It's probably best suited for finding new service providers for recurring needs (gas, car washes, oil changes, ammunition, range time, food) and less suited for one-offs (funerals, weddings, ...).
Alex3917 15y ago
I doubt this will work because it doesn't take into account Zipf's law. The problem is that we live in a world where 1% of the population creates 90% of the content, so it'll be impossible to get enough people actively participating except for maybe with places like Shake Shack that don't need it anyway. If they created a new service specifically designed just for this then it might work with a few tweaks, but creating something just for the Loopt user base seems like a dubious decision.
nikcub 15y ago
I can't see this variation of the model working because usually when you are near a store, the deal or offer is something that needs to be acted on within a few minutes Imagine you are going out to get lunch. In the GroupOn model you have already pre-purchased a deal and you can plan ahead. In this Loopt model you can't make an instant decision based on where you are since it involves going back to loopt, etc. etc. This would be more interesting if vendors could list their deals or vouchers on loopt and it would alert you when you are near one (based on location and/or time) Ten years ago there was a trial of a similar system - the name of which I cannot recall. But it involved sending bluetooth alerts to your phone when you were near a store that was running a promotion or deal. I used it once to grab lunch and it worked well (you would give your phone number at the counter, the discount was ~30% IIRC). Vendors would likely be interested in a system where they could specify something along the lines of: send me a thousand customers over the next month between 2-4pm who are within 2 miles of my location and are interested in 30% off a pizza. Do not send me customers who have already redeemed a coupon in the past x months. The problem is that type of system would involve a large upfront investment from loopt in going out and getting the customers onto the system. Loopt have the location users, but not the deals. On the other hand GroupOn have the deals, the vendors and the users but do not have the location system. One of these is easier to build than the other
akamediasystem 15y ago
I've been thinking about better ways to use location data for awhile now, and this one is interesting but (for many of the reasons mentioned here) I don't think it's a winner. Here's what I'm working on - a way to use a firehose of location based check-ins to allow venue owners to issue microbribes to get customers in the door. For example: I'm in Tribeca running a bar. I have a dashboard that lets me see in realtime how many check-ins are occurring and where (and I can filter by distance and venue type). I can set thresholds (I'll pay $1 to get any customer in the door, I'll pay $20 to get a group of 4 in the door, etc) OR let an algorithm determine the spot value of getting a customer in the door. My dashboard then automatically generates the appropriate deal. When my other threshold (current capacity/throughput in my venue) is reached, the deal expires. (Of course, I can see how someone who had to wait a long time for a cab might be burned if the deal expires before she arrives - there must be a way around that). Right now, the issue I'm having is - how do people get notified about the deal? If it's in-game and I get a partnership w 4sq, it's a little easier...but it's still irritating to be "pitched to" every time I'm out on the town. If I sign up to a third-party system riding on top of 4sq, it takes me out of the awesome game-mindset that 4sq engenders. Maybe within 4sq, I can click a "bribe me" button? I think nhashem and I are chasing the same battleship - anyone else have any thoughts?
paolomaffei 15y ago
This is wrong on so many levels. The first one is that as a business you are supposed to use deals to bring in new customers, not to let the ones that already know you have a discount The second one is how it'll be marketed to business owners, I understand that a fool is easily parted with this money but this is borderline stupid
sdizdar 15y ago
But just imagine that they can implement something even cooler: I can actually see menus of these pizza places with prices - and information whether they are open or closed? Really...
brianbreslin 15y ago
If they start offering reverse deals, will everything become like a turkish Bazaar, with everything basically being haggled on the fly?
jhamburger 15y ago
"Hi, I have 15 customers I've led along to believe they might get a half off deal at your restaurant, are you game or should I just tell them your word is no good?"
- dguaraglia 15y ago
  This is actually quite an interesting (if somewhat poignant) argument. In a way your name as a merchant might suffer even if you didn't add yourself to the system. This might be the Achilles heel of the whole operation. Edit: typo. 'Achilles Hill'? Really?
americandesi333 15y ago
The key here is timing. Its easier for Priceline to check on the bids with airlines because most of the airline systems support rapid data transfer. In the case of restaurants, it is difficult to predict and build a automated way to get 'approvals'. Therefore, the time it takes for them to get answer back from the restaurant will determine the success of uDeal.
americandesi333 15y ago
When I read this article, it screamed Priceline to me. Its essentially doing the same thing that Priceline does for the travel industry. Its asking customers to select a deal or 'bid' on a deal and then uses that knowledge to close the deal with the restaurants. Like Priceline, Loopt will already have the credit card info and I am guessing the customer will be charged automatically. The key here is timing. Its easier for Priceline to check on the bids with airlines because most of the airline systems support rapid data transfer. In the case of restaurants, it is difficult to predict and build a automated way to get 'approvals'. Therefore, the time it takes for them to get answer back from the restaurant will determine the success of uDeal.
webjprgm 15y ago
Sounds stupid for the small businesses, because only people who already know about a place will ask for a deal there, so they won't be getting any new eyeballs and probably no new customers either. It will just be people wanting deals at places they already go to.
bugsy 15y ago
As described, that's just way too complicated. It also fails completely as advertising since the people have to start out wanting to eat or shop at the place.
- dguaraglia 15y ago
  You are missing the point: if it helps you fill tables with customers, it is good advertising regardless of the customers being new or not. Also, how is an offer based on what you know people want worse than one published to the general public in, say, a newspaper ad?
  - bugsy 15y ago
    Customers proposing that a store they know about and already wish to shop at lower their prices is not the same thing as "advertising". To call this advertising as you just did is a misnomer.
BrandonM 15y ago
Have any of these customer-generation people actually run a brick-and-mortar business themselves? How does anyone expect a business model to be sustainable in the long term when it relies on companies selling their goods at a quarter of their typical price? A business wants a reliable stream of customers, with predictable peaks in activity. When a startup addresses that at a price that businesses can actually bear, then I'll believe the company is going somewhere.

100 points by sama 15y ago

dot 15y ago

sounds like a good idea in theory, but the reason some businesses tend to like groupon is that it brings NEW customers in the door. it's a marketing platform and businesses know that can be expensive. 50% is a lot to pay for a customer rewards program.

sama 15y ago
our hope here is that this will bring a higher quality set of new customers in the door. word of mouth referrals tend to be pretty good. if i create a deal at a place and share it with my friends to get critical mass, that may be a better crowd that a daily deal email list.
- geofflewis 15y ago
  But given a deal is contingent on your salesforce convincing the merchant to work with you (on a very tight timeframe / compressed sales cycle), doesn't this mean that by definition, most of the deals desired by users will not come to fruition? Won't this result in a poor experience for the majority of users?

greencircle 15y ago

It sounds like blackmail. I'd be just as embarrassed using Loopt as I would be using Groupon.

StavrosK 15y ago
I don't understand, how is it blackmail? It sounds useless to the store owner, because people basically say "I want cheaper things, give them to me", but it doesn't sound at all like blackmail.

gigawatt 15y ago

Taking the immediate gratification away from the consumer and giving it to the business, combined with surprise credit card charges, makes this pretty unappealing. At least to me, as a consumer.

Hovertruck 15y ago

Honest question... Does anyone on HN use Loopt? I've tried it a few times over the years and it never really comes to close to making me want to continue using it.

loumf 15y ago
I tried, but it was before iPhone had any kind of push notifications, live in a low population area, not a lot of my friends are early-adopter social tech types, and I'm too old to want to hang out with random people I saw on Loopt -- so, it didn't work for me. I'd be willing to give it another try. Interestingly, in the meantime, there was a lot of foursquare adoption among friends and in the area -- enough to get network effect benefit. I don't think many of my friends have heard of Loopt.
rdl 15y ago
I tried it, but found it slightly less compelling than Foursquare or FB Places (which I tried for a month of solid use); none of these services really hold my interest. The only thing I am interested in is where my actual friends are looking at doing things in the next 0-8 hours, not where people I know from facebook are during the day. Google Latitude actually does a better job of this for me than any other service I've tried, but it's still basically useless. Checkins were marginally useful to me in seeing where I ate lunch each day. Looking at things retrospectively was the most interesting use, and turned out to be somewhat depressing (home, gas, office, lunch across the street, office, fry's, office, datacenter, home, repeat indefinitely).
cemregr 15y ago
Haven't seen any Loopt activity on my social networks for a long time now. Are they in the deadpool?

gigantor 15y ago

Too much time between the request and delivery. There needs to be some sort of instant gratification for this to fly, otherwise it's essentially asking users to do free market research. Profit sharing with the users should the deal come into fruition would certainly inspire them to continue populating the merchant database.

nhashem 15y ago

While it's a theoretically cool concept, the actual implementation doesn't appeal that much to me as a consumer and I'm not sure it'll really appeal to businesses. Would I want to get $20 at a nearby pizza place for $10? Sure. But how useful is it if I have to wait an indeterminate amount of time (if ever) to get the deal? I'm likely to only suggest local businesses that I frequent a lot anyway, and how useful is it to them to offer discounts to mostly regularly paying customers? That being said, I do think this is moving the industry in a direction for variable prices for local businesses. Imagine a real-time feedback loop where it's 4pm and you could ask your local pizza place for a discount and they could instantly reply whether they granted it or not. It's a lull before dinner and they have some pizzas from lunch they've just kept warming up, so they grant you the discount. Or actually a kids' soccer team shows up and takes over the place so they decline the discount. This doesn't work so well with resellers (which is pretty much any restaurant), but it could definitely work with service businesses that have to pay their staff whether clients show up or not. We'll see if companies like Loopt have this vision in mind and whether they can make it possible.

deleted 15y ago
[deleted]
patio11 15y ago
A friend of mine has a company in Japan which pretty much solved this. Solution: big digital billboard in mall which aggregates tweets from mall merchants. If nobody is getting their hair cut, they tweet "$5 off for next person at Cheap Cuts" from cell phone. Merchants/mall apparently think it is a gift from God.
- yaix 15y ago
  Simple and useful. Good idea.
- stcredzero 15y ago
  Solution: big digital billboard in mall which aggregates tweets from mall merchants. A virtual billboard in the form of a smartphone app might be preferable in different kinds of public spaces. It might also be a good adjunct to the digital billboard.

agscala 15y ago

Good idea, but u-Deals is a dumb name.

patio11 15y ago

That seems strictly inferior to Groupon: it cannibalizes existing customers by design, but to get there, you need to nondeterministicly charge people's credit cards. So it is a reward card, with the restaurant paying 50% of reward values to, um, not reward their customers except weeks after the fact some of the time.

revorad 15y ago

This sounds like enabling haggling in markets where traditionally it hasn't been done (even in Asia where haggling over price for any product is quite common). If I say I will go to a restaurant on the condition that I get a 50% discount, I'm probably not going to spend much more there or go back again without a discount. Not sure this is a winner for businesses.

badusername 15y ago

Hmm, I request a deal from a business nearby. I am already there physically, but I don't get anything at that time, for all the effort I've put into getting there. I have moved on, it is three months later - I might be in a different country for all you know - and voila, a credit card transaction tells me that I've purchased some deal that I probably have no longer any interest in. Seems like it could have worked in 1980, but for today, I see gaping holes in user experience.

ssozuer 15y ago

It sounds good that using loopt to search some kind of stuff which you need it instantly(like cafe,bar..) in a local place you are not familiar, rather than using it like Groupon's vision. The most importantly, local markets should feed back the system instantly and people can make proper decisions at that moment. I think, mainly idea is cool.

rdl 15y ago

I think this is interesting -- I'd probably use it in high density areas with lots of options, only. For instance, there are ~50 restaurants in Castro St in Mountain View. I've been to 15. I'd like to try about 20 of the others, so signing up for all of those would make sense. It's probably best suited for finding new service providers for recurring needs (gas, car washes, oil changes, ammunition, range time, food) and less suited for one-offs (funerals, weddings, ...).

Alex3917 15y ago

I doubt this will work because it doesn't take into account Zipf's law. The problem is that we live in a world where 1% of the population creates 90% of the content, so it'll be impossible to get enough people actively participating except for maybe with places like Shake Shack that don't need it anyway. If they created a new service specifically designed just for this then it might work with a few tweaks, but creating something just for the Loopt user base seems like a dubious decision.

nikcub 15y ago

I can't see this variation of the model working because usually when you are near a store, the deal or offer is something that needs to be acted on within a few minutes Imagine you are going out to get lunch. In the GroupOn model you have already pre-purchased a deal and you can plan ahead. In this Loopt model you can't make an instant decision based on where you are since it involves going back to loopt, etc. etc. This would be more interesting if vendors could list their deals or vouchers on loopt and it would alert you when you are near one (based on location and/or time) Ten years ago there was a trial of a similar system - the name of which I cannot recall. But it involved sending bluetooth alerts to your phone when you were near a store that was running a promotion or deal. I used it once to grab lunch and it worked well (you would give your phone number at the counter, the discount was ~30% IIRC). Vendors would likely be interested in a system where they could specify something along the lines of: send me a thousand customers over the next month between 2-4pm who are within 2 miles of my location and are interested in 30% off a pizza. Do not send me customers who have already redeemed a coupon in the past x months. The problem is that type of system would involve a large upfront investment from loopt in going out and getting the customers onto the system. Loopt have the location users, but not the deals. On the other hand GroupOn have the deals, the vendors and the users but do not have the location system. One of these is easier to build than the other

akamediasystem 15y ago

I've been thinking about better ways to use location data for awhile now, and this one is interesting but (for many of the reasons mentioned here) I don't think it's a winner. Here's what I'm working on - a way to use a firehose of location based check-ins to allow venue owners to issue microbribes to get customers in the door. For example: I'm in Tribeca running a bar. I have a dashboard that lets me see in realtime how many check-ins are occurring and where (and I can filter by distance and venue type). I can set thresholds (I'll pay $1 to get any customer in the door, I'll pay $20 to get a group of 4 in the door, etc) OR let an algorithm determine the spot value of getting a customer in the door. My dashboard then automatically generates the appropriate deal. When my other threshold (current capacity/throughput in my venue) is reached, the deal expires. (Of course, I can see how someone who had to wait a long time for a cab might be burned if the deal expires before she arrives - there must be a way around that). Right now, the issue I'm having is - how do people get notified about the deal? If it's in-game and I get a partnership w 4sq, it's a little easier...but it's still irritating to be "pitched to" every time I'm out on the town. If I sign up to a third-party system riding on top of 4sq, it takes me out of the awesome game-mindset that 4sq engenders. Maybe within 4sq, I can click a "bribe me" button? I think nhashem and I are chasing the same battleship - anyone else have any thoughts?

paolomaffei 15y ago

This is wrong on so many levels. The first one is that as a business you are supposed to use deals to bring in new customers, not to let the ones that already know you have a discount The second one is how it'll be marketed to business owners, I understand that a fool is easily parted with this money but this is borderline stupid

sdizdar 15y ago

But just imagine that they can implement something even cooler: I can actually see menus of these pizza places with prices - and information whether they are open or closed? Really...

brianbreslin 15y ago

If they start offering reverse deals, will everything become like a turkish Bazaar, with everything basically being haggled on the fly?

jhamburger 15y ago

"Hi, I have 15 customers I've led along to believe they might get a half off deal at your restaurant, are you game or should I just tell them your word is no good?"

dguaraglia 15y ago
This is actually quite an interesting (if somewhat poignant) argument. In a way your name as a merchant might suffer even if you didn't add yourself to the system. This might be the Achilles heel of the whole operation. Edit: typo. 'Achilles Hill'? Really?

americandesi333 15y ago

The key here is timing. Its easier for Priceline to check on the bids with airlines because most of the airline systems support rapid data transfer. In the case of restaurants, it is difficult to predict and build a automated way to get 'approvals'. Therefore, the time it takes for them to get answer back from the restaurant will determine the success of uDeal.

americandesi333 15y ago

When I read this article, it screamed Priceline to me. Its essentially doing the same thing that Priceline does for the travel industry. Its asking customers to select a deal or 'bid' on a deal and then uses that knowledge to close the deal with the restaurants. Like Priceline, Loopt will already have the credit card info and I am guessing the customer will be charged automatically. The key here is timing. Its easier for Priceline to check on the bids with airlines because most of the airline systems support rapid data transfer. In the case of restaurants, it is difficult to predict and build a automated way to get 'approvals'. Therefore, the time it takes for them to get answer back from the restaurant will determine the success of uDeal.

webjprgm 15y ago

Sounds stupid for the small businesses, because only people who already know about a place will ask for a deal there, so they won't be getting any new eyeballs and probably no new customers either. It will just be people wanting deals at places they already go to.

bugsy 15y ago

As described, that's just way too complicated. It also fails completely as advertising since the people have to start out wanting to eat or shop at the place.

dguaraglia 15y ago
You are missing the point: if it helps you fill tables with customers, it is good advertising regardless of the customers being new or not. Also, how is an offer based on what you know people want worse than one published to the general public in, say, a newspaper ad?
- bugsy 15y ago
  Customers proposing that a store they know about and already wish to shop at lower their prices is not the same thing as "advertising". To call this advertising as you just did is a misnomer.

BrandonM 15y ago

Have any of these customer-generation people actually run a brick-and-mortar business themselves? How does anyone expect a business model to be sustainable in the long term when it relies on companies selling their goods at a quarter of their typical price? A business wants a reliable stream of customers, with predictable peaks in activity. When a startup addresses that at a price that businesses can actually bear, then I'll believe the company is going somewhere.