So Groupon's CEO mistake was that other people DISCOVERED his fraudulent activities? That's a great learning LMAO. It sounds very much he hasn't learned a thing.

He also railed against companies with unsustainable business models. And someone asked him why he went public, if going public was the worst thing he ever did. His reply was that because of how Groupon was financed, it was basically forced to go public.

It was very odd. I got the sense that he got frustrated with all his business ideas failing, ran with the one business idea that actually could succeed (which was basically a pyramid scheme dressed up as marketing), but never really got comfortable in his own head with running a pyramid scheme, so all sorts of psychological defense mechanisms come out when he talks about it. His other actions (like introducing Progressive Equity [1], and his subsequent startups Detour and Descript having legit if less successful business models) also suggest this.

[1] https://medium.com/detour-dot-com/introducing-progressive-eq...

My accounting professor used Groupon as an example of a company that was aware it's business model was unsustainable. Basically, their domestic churn is remarkably high because businesses realize after a couple campaigns on Groupon that they're actually losing money. So, Groupon decides to tap international markets. This does nothing to reduce churn, so it's just a matter of how long it takes before they run out of new businesses to bring into the fold.

Isn't he the one that started Lightbank VC fund - which offers $100k funding for 50% of your company? [1]

Anyone who offers a deal like that can't be very ethical.

[1] https://www.quora.com/When-is-lightbank-starts-100k-for-50-a...

He got rich. His own reputation pretty much stays intact as genius visionary founder.

It's not much of a learning experience if all you get is rewards. Even if he's bitter that the rewards weren't as much as he wanted.

Then there's the continual pressure of trying to serve two masters: your original customers vs shareholders. Often it's the latter that takes precedence when they go public. What would FB or Goog be like if they were still private?

Larry and Sergey still have >50% of the voting power. Zuckerberg has >60% of the voting power.

Do you really think these companies are just following what shareholders are telling them?

Also they’re special cases where the founders’ visions have created so much shareholder value that there hasn’t been much for the shareholder to say anyway...

They ARE following the shareholder. The founders are the shareholders. The minority shareholders are just along for the ride.

ideally there Is a trade off between staying private to have more control and hopefully make better decisions that aren’t quarterly-focused, vs having more capital. In practice it seems like a game of “how long can we get away with cutting corners until we are big enough that going public won’t ruin us entirely”

I agree, but think its a shame the game has become so common place in this era. Hopeful that we’ll see more players emerge who are focused on a strategy of sustainability and ethics.

Take away capitalism and we’re all famished peasants in the best case scenario.

There is no law making those mutually exclusive. And the infinite greed isn’t “capitalism” in an of itself, it is human nature that is the root cause. IMO we are at a point in time where we need more high-profile examples of capitalists who are not motivated by greed. And I’d argue there are a million small and medium sized businesses, run by capitalists, who operate in ethically and beneficial manner.

It's worth considering that it is human nature but in the context of the society it is based in.

The boundaries of human nature in regards to capitalism are very different across societies/ nations.

An example of this is the difference between the US and Europe. US capitalism is much more unrestrained, ruthless, and uncaring compare to Europe.

In the US the business is treated in higher regard and respect than the people compared to Europe. Of course Europe does this to some extent but it is more limited than the US.

The US would do well to take a leaf out of Europe's book.

> In the US the business is treated in higher regard and respect than the people compared to Europe.

I don't understand what this means. What "people" are you referring to? What is the context for "higher regard"?

People as in the average citizens. Higher regard being that the business has less control over the benefits of your life in Europe compare to the US.

Good affordable healthcare is standard many European countries. In the US it depends on your employer.

Minimum holiday entitlement in Europe is far more generous that in the US where again it is down to the business.

Maternity and paternity leave is better in Europe. In the US it depends on the business and your position in the comapny whether you get reasonable leave.

Unemployment benefits are more humane in many European countries. I have heard that in the US they will contact your last employer and whether you get unemployment benefits depends on what the employer says. While there are some limits in this regard in Europe your Ex employer's word doesn't hold as much weight.

I'm sure there are more examples I could come up with as well.

A small minority live fantastic lives in the US because the US has taken the idea of meritocracy and dialled it up to 11. The floor of the have-nots is much lower in the US in comparison to Europe because businesses have a wider degree of discretion in how they treat and reward employees. The person on the shop floor gets 1 week a year holiday while the regional manager gets 5 weeks a year.

Of course businesses in Europe have some discretion in the upper limits to the benefits they offer their employees but they are still restraint in the lower limits.

These differences I suspect are exactly why the GDP per capita is lower in European countries than in the US. Take Germany for example, an economic powerhouse and the 3rd largest global exporter. Impressive for a nation of just 83 million.

The US has a PPP GDP per capita about $10,000 higher than Germany I find it very difficult to believe the US is $10,000 more productive than Germany. The US just puts more value in wealth creation (business) at the expense of the people.

Europe has it's flaws in some of these things as well (e.g zero hour contracts) however it does better by the people more so than the US.

> And the infinite greed isn’t “capitalism” in an of itself

True, but the problems with communism aren't communism in and of itself either, but the reality is that these things incentivize certain types of behavior nonetheless.

And capitalism is built on exploiting that same human nature.

Even if individual capitalist isn't motivated by greed, the market itself is. It's literally built on presumption of infinite growth.

Small and medium sized business, are more like a stage in lifecycle than an exemplar. They either get merged or sold into a larger entity or they grow to become a larger entity.

>> Small and medium sized business, are more like a stage in lifecycle than an exemplar. They either get merged or sold into a larger entity or they grow to become a larger entity.

Totally inaccurate. Having trouble finding sources but something like 99% of small business in US will remain under $5mil annual revenue, a fraction of a percent will be acquired. I'm talking all sectors, not tech.

>> It's literally built on presumption of infinite growth

There is nothing inherent to capitalism that presumes this.

One of the big challenges is the asymmetry in when to go public relative to your competitors. If you go public too soon, you're competitors get the upper hand because they can spend more freely on growth without oversight and that lets them suck investment dollars out of the market like fire consumes oxygen. If you go public too late, then you learn no discipline with how you spend and the market recoils in horror and you burn out before getting costs under control before running out of runway. Blitzscaling has really changed things.

Worst mistake he made was not just taking the money from google.

It is shocking, and kind of infuriating, that he whines about going public being his biggest mistake when the only reason it was a problem was because of his companies questionable behaviour.