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Marc Andreessen explained the use of those metrics on Rap Genius: “As someone who was in the room as an observer at the Groupon board when the decision to use

Marc Andreessen explained the use of those metrics on Rap Genius: “As someone who was in the room as an observer at the Groupon board when the decision to use these metrics was made, I think Groupon was honestly trying to provide additional information that investors would find useful, which mirrored the way management thought about running the business. However, no good deed goes unpunished, and widespread media paranoia about business metrics still lingering from the 2000 dot com crash combined with other missteps on Groupon’s part combined to make the use of those non-standard metrics highly controversial and ultimately negative for the company.”

nraynaud 13y ago
They could have added them on the side. But they where trying to tap public markets and avoid revealing the operating costs at the same time. Going to Wall Street is optional, but going there is a huge commitment and those bankers act in a very predictable manner.
jgalt212 13y ago
Andreessen is full of crap here. Plain and simple. These metrics were more about deception than perception. Mind you these comments came from the same guy who called for an end to "Bullshit Metrics." MA has no credibility. http://allthingsd.com/20121217/andreessen-and-mixpanel-call-for-an-end-to-bullshit-metrics/ http://allthingsd.com/20121217/andreessen-and-mixpanel-call-...
- ironchef 13y ago
  It's not plain and simple. The thought, at the time, was that the marketing expenses _can_ be amortized. GAAP doesn't let you do that (there's only certain kinds of marketing expenses you can amortize). Groupon's view was that the marketing expenses were a dial they could dial down at any time to reduce total amount of customer acquisition and they would still have residual customer capture. Groupon was, perhaps stupidly, trying to give potential investors more information. Aaron swartz had a post about it as well: http://www.aaronsw.com/weblog/acsoi http://www.aaronsw.com/weblog/acsoi

nraynaud 13y ago

They could have added them on the side. But they where trying to tap public markets and avoid revealing the operating costs at the same time. Going to Wall Street is optional, but going there is a huge commitment and those bankers act in a very predictable manner.

jgalt212 13y ago

Andreessen is full of crap here. Plain and simple. These metrics were more about deception than perception. Mind you these comments came from the same guy who called for an end to "Bullshit Metrics." MA has no credibility. http://allthingsd.com/20121217/andreessen-and-mixpanel-call-for-an-end-to-bullshit-metrics/ http://allthingsd.com/20121217/andreessen-and-mixpanel-call-...

ironchef 13y ago
It's not plain and simple. The thought, at the time, was that the marketing expenses _can_ be amortized. GAAP doesn't let you do that (there's only certain kinds of marketing expenses you can amortize). Groupon's view was that the marketing expenses were a dial they could dial down at any time to reduce total amount of customer acquisition and they would still have residual customer capture. Groupon was, perhaps stupidly, trying to give potential investors more information. Aaron swartz had a post about it as well: http://www.aaronsw.com/weblog/acsoi http://www.aaronsw.com/weblog/acsoi