Monday, January 31, 2011

Fastest Growing Web Company in History

They have about 1000 employees in Chicago and they’re adding sales offices around the world. Their CEO was a music major who migrated to programming. They hired 50 writers from the Chicago improv scene to write catchy sales phrases. The CEO has an ice cream freezer in his office and all are welcome to it. They recently turned down an offer from Google to purchase their company for a reported 6B.

You guessed it. According to Forbes and Wall Street Journal, Groupon is the fastest growing company in Web history. After two years they have 500M in revenue and are expected to grow exponentially. Groupon was valued at 1.35B. The only other company that achieved a Billion dollar valuation as quickly was YouTube, who is still waiting to make a profit.

Groupon is doing everything that a dot com company is supposed to do -- huge sales, big profits and a solid connection between “bricks and mortar” retailers and online consumers. Getting people into stores from online coupons is the “the holy grail” that many others have tried to do and not succeeded. One of their most popular items so far: a $25 ticket for a Chicago architectural boat tour sold for $12. In May Groupon moved 19,822 tickets in eight hours and split the $238,000 with the tour operator. These guys make money.

Vendors generally share half the revenues with Groupon. Why are vendors willing to give such a huge cut to Groupon? For one thing, Groupon makes it so fast and easy for vendors to start using their service. But probably the biggest attraction is the chance for repeat customers. If you get people through your door and they like your product, then they will probably come back. My guess is that the Chicago boat tour did not expect to sell 20,000 tickets in eight hours (those are rock star numbers). This will keep them busy for quite a while.

Groupon is now in 88 US cities and 22 countries. As more and more mobile phones are purchased and upgraded they will continue to grow. Many competitors, like Living Social, have sprung up. Google’s bid to purchase Groupon was unsuccessful. I wonder if Groupon is available at any price. Chances are that they just are not for sale. According to Wired Magazine, Google has built their own Groupon clone called Google OffersFacebook Places could definitely give Groupon a run for their money too.

Many are speculating that Groupon will go public in 2011. They are reportedly talking to banks. What would you be willing to pay for a piece of Groupon? Do you think they will hold their value in the face of the competition? My opinion is that they will go public in 2011. They will have a valuation of over 10B and they will be oversubscribed.
Tim Collins
President and Owner, Stafflink Solutions

Thursday, January 20, 2011

What Would You Do To Get a Job?

I just read Steve Schimmel’s story of going from handing out resumes on the street to becoming the 13th employee of Google. His story brings up so many questions about what it takes to forge a great career. Was it luck that propelled Schimmel to meet the right people? Or was it Schimmel’s persistence and creativity that propelled him to success?

Even from his humble beginnings, Schimmel graduated Magna Cum Laude and Dean’s List from university in Business. Armed with his degree, Schimmel set out to get his first job. After searching for over a year in San Francisco and not getting anything he started to get desperate.

One day he noticed a panhandler, and a person with a giant placard that said “REPENT” looked him straight in the eye. Something clicked. The next day he put on his best thrift store suit and took the 5am bus to the financial district in San Francisco. While wearing a sandwich board asking for help with his job search, he handed out resumes on the street. This was one of the most humbling moments of his life. He says his faith in people was renewed that day and, amazingly, this lead to him getting a job as an associate equity analyst.

Schimmel eventually left that job to run his own business but ran out of money. He found himself back on the job market. He started by calling CEO’s of the companies that were advertising jobs. He eventually connected with one CEO who was so impressed with his drive, that he referred him to a little startup called Netscape. When Netscape was purchased by AOL in 1999, Schimmel and many other employees moved on.

He took a job with a little search engine company that had just been founded by two Computer Science Ph.D. candidates at Stanford. Schimmel joined them as lucky employee 13. At the time they only had a few thousand searches performed each day, mostly by academics, and no revenues. But, as you already guessed, this little company grew into Google, the world leader in search technology which now brings in billions in revenue each quarter. Steve negotiated Google’s first 100k deal and their first 1M deal. He was on the original design team for Adwords.

In his own words, people gave him a “shot” and he was able to evolve from poor kid to successful businessman to retired by 32 years old.

Schimmel talks about doing things you can be proud of. I love the motto that he and his friends live by, “Don’t be evil.” He says, “It is a philosophy of doing what’s right and letting the money follow.”

One of the lessons that I learned from Schimmel’s story is that you must be persistent, creative and willing to take risks in your job search.

My personal motto is “what goes around comes around”. I believe that if you help others, you will be helped by either the people you help, people they know or internally by the satisfaction that you receive from helping somebody else.

Have you ever used an unconventional method to land a job? What is your personal motto? Share a story about how you made yourself standout?

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Tim Collins
President and Owner, Stafflink Solutions

Wednesday, January 5, 2011

7 Segment Changers and Predictions for Tech in 2011

Hold onto your hats (or should I say wallets) because we’re in for some big changes in 2011. Here are seven up and coming technologies that recently caught my eye:

Mobile Wallets

Smartphones are going to begin a whole new market segment called Mobile Wallets. Will our cellphone become our new credit card? Recently Google bought mobile payment startup Zetawire. The NFC chip, which will allow for mobile payments, will start to be put into all mobile phones during 2011. The newest Nexus phones come with the NFC chip. According to TechCrunch, Apple was recently looking at purchasing BOKU, another mobile payments startup. But I believe the real revenues will come in 2012 in the Mobile Wallet world.

Square – The NFC chip is big, but I think that the most exciting development on the horizon for smartphone commerce is Square.
This product was created by Twitter co- founder Jack Dorsey. I believe that Square will revolutionize the way credit card payments are made. Square is a plastic attachment for cell phones (only iPhone and Android so far) that creates a sophisticated POS (point of sale) for all businesses. 
Square will allow anyone to accept credit card payments without contracts or monthly fees. According to Square, this small device is free with a 15 cent/transaction fee. Here’s a video on how Square works -

Paypal Bump

Money will be transferred between phones by bumping two phones together. Here’s an entertaining video (good British humour behind a great app) that shows this Paypal Bump and the iPhone application in action: 


Quora – - is hot in Silicon Valley and I believe that 2011 will be the year it will make it big outside the “Valley.” The executive team that heads things up on the technology side all come from Facebook. They know more than a thing or two about social networking. Quora gives you the ability to follow topics and questions as well as people. It defines your profile by interests, not just by people you know. While Twitter and Facebook are also trying to create this interest graph, Quora is designed from the ground up for interest graphs. Check it out to be ahead of the social curve. Here’s a 60 second social media profile on Quora -

IPO Comeback

During the last two years we haven’t seen many successful IPO’s. This will begin to change in 2011. Recently Telsa stock has been skyrocketing. Kayak and Skype have announced that they are going public. Companies such as LinkedIn, Zygna and Groupon have intentions to go public. Everybody is speculating whether Facebook will go public. They raised 500M on a 50B valuation so Facebook may be able to wait a while before they go public. Recently there has been a lot of money on the sidelines in the technology realm. Many technology companies are profitable before going public unlike the more reckless investment model that characterized the “dotcom bubble.”

Battle for TV

The way we watch TV will continue to change in 2011. Apple has launched AppleTV that streams movies amongst other things. But competitors such as Google and start-ups Boxee, Hulu and Roku are going to throw a few punches in the battle for your TV viewing. This battle will create a giant market for apps that could rival the billion dollar smartphone app market.

Tablet Market

In 2010 we saw the arrival of the iPad that has created a new technology segment called the tablet market. The iPad is awesome. I'm sure Apple has an even more awesome iPad 2 in store for us. Can Apple's competitors come up with a credible product to compete with the iPad in 2011? Will the new version of the iPad leave the competitors in the dust? One thing is for sure, we will see many new competitors in the tablet market from Google, Dell, Samsung, and RIM to name a few.

It is going to be a very exciting year! By the end of 2011, I believe that Square, Mobile Wallets, Quora, IPO’s and the battle for TV are going to change the way we think about our technology and business.

What are your predictions for 2011? Which technologies and companies are you watching?

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Welcome to Toronto Silicon Valley North
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Tim Collins