May 26, 2012

Deal: Virgin America vouchers for travel through June 15

Filed under: Uncategorized — Rakesh Agrawal @ 8:53 am

Last summer, Virgin America ran an incredible deal for air travel. I bought too many and need to get rid of some of them.

These are great vouchers that are good for any city in Virgin’s route map. They are good for last minute trips and are in Main Cabin Select, which includes extra legroom, unlimited free food and alcohol, unlimited premium movies and priority security and boarding.

As you all know, I’m a huge fan of Virgin and fly them whenever I can.

Here are the high level terms:

  • Good for last minute trips. I’ve used some of my vouchers for trips that otherwise would cost $2,000.
  • Must complete all travel by June 15.
  • Only valid in Main Cabin Select.
  • You are responsible for taxes. For U.S. trips, this is about $14 for a non-stop. Cabo, Cancun and Puerto Vallarta taxes are about $90.

I’m asking $400 each. (Which is roughly what I paid, plus transaction costs.) You can pay me by paypal and I will send you the code that you can use to redeem on Virgin’s Web site.

If you are a friend and are coming to visit SF, you also get a place to stay in my guest room.

Interested? Email me at

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May 18, 2012

Why I didn’t write about Groupon’s 1Q earnings

Filed under: Uncategorized — Rakesh Agrawal @ 7:09 am

Some of you undoubtedly noticed that I didn’t write up my views on Groupon’s earnings.

It’s not because Groupon suddenly proved that I’ve been wrong for the past year. To the contrary, Groupon’s earnings report reinforced everything I believe about the company. Since earnings, I’ve bought even more puts against the company. I believe that the markets continue to misread the company and that the company takes very deliberate actions to confuse the markets. There are a number of intricacies of accounting that come into play. (In this case, unlike in the past, Groupon isn’t doing anything wrong.)

The primary reason I didn’t write up my analysis is that it doesn’t help small businesses or entrepreneurs. It would primarily help professional money managers and hedge funds.

My goal all along has been to help small businesses and entrepreneurs. The byproduct of that has been helping professional money managers. But professional money managers can afford to pay for my analysis; many of them value it and already do. It’s counterproductive for me to give that analysis away.

This situation illustrates the two markets for financial news: the consumer market and the professional market. Over the past year, a number of people have told me that I’m providing professional-grade analysis in the consumer media market.

Unfortunately, the two markets also pay vastly differently. It’s incredibly hard to make meaningful money in consumer media. You need a lot of scale. But if you have unique information in the professional markets, it’s worth a lot of money.

Tiering of information is very common. Bloomberg and Reuters are two of the world’s highest quality news organizations. But they fund their news operations with the massive profits they make from their professional products. I was talking to someone earlier this week who told me, “If there’s one thing we can thank Wall Street bankers for, it’s funding two high quality news sources.”

There’s another challenge with writing sophisticated financial analysis for the consumer press: many people don’t understand it. Then I have to deal with comments and personal attacks from people who have no clue what I’m talking about. That provides a negative value for me. When I’m talking to hedge funds and mutual funds, at least I know they understand the core of my argument. (Even if they don’t always agree.)

Going forward, I’ll continue writing about business models and elements of the story that affect small businesses and entrepreneurs. I want to help both of those groups succeed.

May 11, 2012

Bet with Alex Lawrence

Filed under: Uncategorized — Rakesh Agrawal @ 8:24 pm

I have a bet with Alex Lawrence that is a derivative of my bet with Paul Kedrosky. If I win my bet with Kedrosky on 5/15, I win the bet with Lawrence. This means that at the end of trading on 5/15, Groupon is worth less than $6 billion, the price that Google reportedly offered for Groupon.

Stakes: loser buys dinner at restaurant of winner’s choice when we’re in the same city.

May 10, 2012

More PR tips for startups

Filed under: Uncategorized — Rakesh Agrawal @ 6:22 am

Here are some more PR tips for startups:

  • Be out there. Reporters often get story ideas or thoughts for sources by doing Google searches or looking through blogs. If you have a strong presence elsewhere, it increased the odds that a reporter will contact you.
  • Follow up. If you’ve engaged with a reporter, be sure to offer help along the way. When I was in New Orleans recently, I wanted to do a piece on how cell networks deal with large surges in demand. Verizon loaned me several devices. After I had a day to play with them, Verizon’s PR team checked in to make sure the devices were working.
  • Details matter. Verizon PR knew that I was going to be testing the devices at Jazz Fest. They pre-loaded the Jazz Fest app on both devices. That was a thoughtful touch that I definitely noticed.
  • Don’t email links to the exclusive you just gave a competitor. That’s a pretty surefire way to ensure you won’t get coverage.
  • Pay attention to what’s going on in other news. If Facebook updates their S-1 on the day you had planned to talk about your product, you might want to re-consider your launch. It may not seem fair, but that’s life. Chances are that your story won’t see the light of day.
  • Pay attention to reporters’ schedules. If there are specific reporters you are targeting, follow them on Twitter. I’ll tweet out when I’m traveling or on vacation. Those are generally not the best times to reach out.
  • Pay attention to reporters’ own quirks. Many people tweet out their pet peeves about PR people or what they look for in stories. Be on the lookout for those.

May 6, 2012

Weekly reader: GrubHub, Yelp, Groupon, computer science

Filed under: groupon, yelp — Rakesh Agrawal @ 8:23 pm

I was in New Orleans for Jazz Fest this week, but managed to get more writing in than I expected.

For the first time this week, we saw Groupon drop below 50% of its initial IPO price of $20, closing the week just below $10. Anyone who invested at the IPO and help (are there any of these people?) would have lost half their money.

This coming week, I’ll be in San Francisco. To make up for my lack of Groupon writing the last two weeks, I’ll be doing one Groupon post each day.

My work

GrubHub is bringing restaurant ordering into the 21st century – GrubHub is giving restaurants converted Kindle Fires to confirm orders. This is making it easier for restaurants while at the same time reducing customer service costs. It’s the kind of smart thinking I like to see in local.

Why Yelp is the Digg of local – Yelp has essentially failed to innovate in the last three years. It’s using an old publishing model that doesn’t make sense. But for consumers, it’s delivering one-size-fits-all results that really fit no one.

Top sales talent leaving Groupon as its woes mount – Many Groupon deals these days are seeing really low volumes. This breaks the overall Groupon model, which was predicated on selling thousands of units to cover the extremely high cost of sales. As volumes drop, salespeople can’t earn enough money on commissions and the best ones are leaving for greener pastures.

Silicon Valley needs to end its snobbery about computer science degrees – In the wake of Yahoo CEO Scott Thompson’s resume scandal, I take a look at Silicon Valley’s snobbery around computer science degrees. I want to be clear that I’m in no way defending Thompson. He lied and there should be serious repercussions, both from Yahoo! and the SEC. (Otherwise, what’s the point of having CEOs certify statements to the SEC?) But I think that Silicon Valley ends up getting tunnel vision because of the focus on C.S. degrees for roles that don’t need them.

Me quoted elsewhere

When Yelp advertisers yelp at rates – CBS MoneyWatch takes a look at Yelp advertising. I continue to believe that Yelp local advertising is a terrible deal and no advertiser should ever run ads at the rates Yelp charges. (I’m rarely this absolute — even with Groupon, I can think of cases where running a Groupon makes sense. I can’t think of a case where I’d recommend Yelp to a business.) I found more examples this week that I’ll write about soon.

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