Harland Clarke Acquires RetailMeNot for $630M | Hacker News Reader

Harland Clarke Acquires RetailMeNot for $630M

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"Never build your startup on another conpany's platform"

That's true.. and if you followed that advice..

- You would never have started retailmenot (too dependent on Google traffic)

- You would never start Buffer and have over 10 million in annual revenue (too dependent on twitter api)

- You would never would have started Heroku and get acquired for millions (too dependent on AWS)

- You would never have started SimilarWeb and be valued at over 100 million dollars (too dependent on browser extensions and Google)

Josh Elman, one of the partners at Greylock, gave a great talk on How to Build on Other Platforms at the Weapons of Mass Distribution conference a few years ago. It's really worth watching if you're thinking about building on another platform:

Josh Elman "How To Build On Other Platforms" - https://www.youtube.com/watch?v=m0j1NaFpEkg

Yes, there are certainly success stories built on the shoulders of giants.

But for every success, there are dozens (if not hundreds) of failures because the giant decided to brush off their shoulders.

It's a risk you just have to factor into building a business this way. And always have a ready-to-go Plan B for when that risk turns into reality.

I think it's wishful thinking that you can build a business and not have dependencies on things outside of your control. It's just a fact a life. Not all things are equally risky, but you can't do everything in house.

Google traffic and AWS are commodities to an extent since they're replaceable. So Heroku and RetailMeNot don't qualify in my book.

More importantly though, the trend is that most companies relying on someone else's platform for survival are cannibalized. A few examples to the contrary don't make it a good idea.

There basically is no replacement for Google traffic. Paid ads are not the same since they cut into margin. Plus you can't even buy many brand related terms too.

I think the point is that if something else took over as the king search engine, they'd likely be able to get traffic there too.

Overtaking Google is unlikely, but Google deciding a certain coupon site is spam/scammy and deranking them is quite the threat and would basically kill them overnight.

What is more likely, Google going away or Google changing their rankings in a way that makes you drop 5 positions? That's the risk of depending on Google, imho.

Building on someone's platform is a risk. But then again all new businesses have lots of risks, including the risk that they don't find enough customers for their product or service. I've hear about startups failing that way far more often.

Lots of companies make tons of money building on platforms like facebook, the iOS App Store, and so on. The question was never if that was a risk free move (nothing is), by whether the potential gain outweigh the risks.

True it is probably not a good idea in a vacuum.

However in the real world where there are very few product ideas that succeed, it is not a bad idea to start something that you feel has a good market, but relies on another company's platform. because the alternative is waiting decades to start a perfect idea.

You would never do any industry that's reliant on MSFT Windows or any of it's office suite ...

There are some add ons and integrations that do well.

I think the nuance that's often missed is that you should never build your startup on another company's platform without a contract (or some sort of contingency plan).

>> That's true.. and if you followed that advice..

... still pretty true.

They've successful gamed SEO to show up for every "<site> coupon/promo code" search result. Unfortunately it's been years since I've actually found a working code on their site. These days I don't even bother clicking on their links.

Last week I saved ~$400 by googling "Lenovo Coupon Code" and using a few it spit out. So yes, sometimes they're bunk, but sometimes you get lucky.

When I bought my Lenovo I made a reddit post asking for such and got exactly that from a Lenovo employee.

One good way to buy from Lenovo is to go through corporateperks.com. Very simple and you get these kinds of discounts all the time. We bought our last couple of machines this way and got a very nice price. (No affiliation with them other than a happy customer.)

One way to buy Lenovo is to google for Lot of X on ebay.com where X is about 3 years old. The off-lease deals and lots of great machines you can find is amazing.

Indeed, I got a top spec x220 for about 450. It was about a year old and still under extended warranty, and practically brand new when I got it. Buying a new Lenovo is worse than buying a new car in terms of depreciation.

The depreciation is mostly because of the vast volumes of company leases ending.

Despite the fairly high reliability of thwir thinkpads, you can easily get good deals on second hand models.

Often those discount codes are advertised quite blatantly on the manufacturers site. A lot of PC Manufacturers tend to have long running discounts on their website that will save you a lot over the original retail.

probably could of got the same result using honey

What is honey?

A browser extension that automatically adds coupons at checkout: https://www.joinhoney.com

It depends on the vertical, but from my experience they're still useful for pizza chains and rental cars. I use Amazon too much to know if they're useful for much else.

For rental cars, I highly recommend AutoSlash.com. No affiliation with them, just used them a bunch of times and have saved $150-$200 on rental.

Wow, nice tip! Thanks!

If you find a better coupon site, figure out why it's not ranking #1, then go build a search engine that rewards whatever that is, and you can kill Google and make billions.

I use their papa johns codes frequently, they always seem to be good for 40% off - however lately I've noticed papa johns trying to cut out the middleman and run their own coupon adwords offers

Papa Johns is partnered with MLB again this year. If a team scores 6 or more, your online order the next day is 50% off. I'm not sure if you have to be local or within a certain mileage of the ballpark. The promo code is usually yankees6, mets6, rays6, etc, as you can see in their NY twitter account below.

https://twitter.com/PapaJohns_NY

They also have an affiliation with the New York Rangers for 50% off the day after the Rangers score 3 goals. It's amusing to me how aggressively they advertise in NYC when all the alternative pizza is cheaper and better.

What alternatives are you talking about? I love NYC mom&pop pizza places, but are there any chains that are better?

I think what I was getting at is that there are no chains that compare to the small pizza businesses in NYC. I prefer Domino's to Papa John's if we're comparing chains though.

Papa johns is so expensive without a coupon code I can't anyone actually buys a pie without one.

Wow, I always thought retailmenot was like a small 2 person company with a bunch of scripts to scrape coupons and rank high in SEO. What do their 500+ employees do.

Former employee here.

It used to be a 2-person company before it was acquired. A large part, surprisingly is scale. During Black Friday to Cyber Monday, for instance, the site is hit pretty hard by all the on-line shoppers. There's also a ton of different sites they manage, of which RetailMeNot is just one (deals2buy is another, a bunch of other international sites). They also have iOS and Android apps, mobile versions of the sites and a lot of community engagement.

There's a whole department to figure out which coupons do well and which affiliates pay better than which other ones to figure out which ones to feature. There's another department to manage all the different commission rates (mostly to call those companies to pay more). There's a whole community engagement group that tries to get more users to submit coupons or more users to use the site. There's a sales department that tries to get exclusive coupons in return for featuring them. There's even customer service to deal with users that are having trouble. Finally, there's a department to acquire new properties. Also, all those international coupon sites have their own mini versions of all these departments.

You also need HR, finance, office manager, etc. The headcount goes up pretty quick. When I left it was around 400 employees. It actually hasn't grown that much in 3+ years.

Wow, very interesting. I too thought it was a 1 man website, largely based on the aesthetics - is that accidental or deliberate? I think the 1 man show might be a better image.

There's a whole slew of designers and UX people, so whatever you see is definitely deliberate. They do a lot of usability testing, not just for the website, but the app, mobile site, etc. You would not believe how many iterations of something tiny like a slight change in the thumbs up button goes through. Everything is related to clicks and revenue, so there's a lot at stake for even small changes.

verify coupons probably.

Pretty horrible outcome for anyone who got in on their IPO ($21/share) just 4 years ago.

It's kind of a fitting end for mostly a sham company. The business model was shaky at best, mostly just milking first page rankings all over google.

The argument that coupon codes incent buying activity is valid, but literally all this company did was be the first on google. If the actual retailer ranked ahead of RTMN for coupon searches, RTMN wouldn't be anywhere near where it is today, and retailers sales would be exactly the same.

It's not easy to be first on google, especially on brands where you don't own the brand. If you can do this consistently please immediately set up a company, charge, and go eventually go public.

Retailers sales would be the same, but they wouldn't be paying unnecessary commission to RMN. Sales commissions make sense when someone is directing new customers to a business. But as has been said in this thread, they were simply better at SEO. The customer was already a) aware of said product and b) showing intention to purchase. These are precisely the value propositions that affiliate marketing was designed for.

I was with you until that last sentence. Are you saying RTMN's model is the same value proposition as all affiliate marketers?

Sites like Expedia, Wirecutter, and hundreds of other review or aggregator websites that monetize through affiliate marketing add way more value to the user than RTMN.

No, that was my point. The exact value that affiliate marketers are supposed to provide, RTMN does very little, and probably none at all. They are a complete failure in delivering on the affiliate value proposition.

I think that's what this company is trying to do: http://thrivecommerce.com/ white label coupon code sites and get them ranked above.

>Pretty horrible outcome for anyone who got in on their IPO ($21/share) just 4 years ago.

Anyone who got in at 21 and didn't sell at 42? They have all my sympathy.

BugMeNot started RetailMeNot.

Good example of a pivot from what I assume? was a hack for fun to a business.

Also a good example of SV style buyouts etc

The BugMeNot guys started the site, but they sold it shortly after creating it - they have nothing to do with the (public) company it turned in to

BugMeNot sold it for $90 million to WhaleShark Media

Sounds like a good pivot to me.

https://delimiter.com.au/2010/12/03/90-million-payday-aussie...

Shortly? It was at least 5 years before Guy and Bevan sold it.

how do borderline scam businesses like these go public? why do people buy their shares? why has ipo market turned into a swamp where sneaky insiders unload their useless shares to?

Why is it a borderline scam business?

'cookie stuffing' is a pretty scammy practice

Once upon a time RetailMeNot was just a fly-by-night operation that scammed retailers using PPC ads and affiliate links. Look at them now.

In what way were they scamming retailers?

They pretend (or pretended) to have coupons that you needed to click in order to reveal. Often upon clicking, the coupons were invalid. Perhaps some were never real. But upon clicking, a pop-under would launch which would drop their cookie.

So a user who was already committed to buying, and in the process of doing so, who simply checked for a coupon while going through the checkout process, would end up generating an affiliate commission for RetailMeNot even though RMN provided no value to either the customer or the merchant.

This is basically a scam that pretty much all coupon sites pull, which is why many companies ban coupon sites from joining their affiliate programs.

What you're describing is cookie stuffing (https://en.wikipedia.org/wiki/Cookie_stuffing). People have been prosecuted over this: http://www.businessinsider.com/ebay-the-fbi-shawn-hogan-and-.... I'm surprised about your claims that a public company would be doing this.

I run affiliate programs for my businesses, none of which have a box for coupon codes when you sign up. Despite that, nearly every day new coupon sites sign up for the affiliate program.

They usually have a webpage full of "coupon codes" offering discounts that don't exist made up, ready to add the referral link to. I remove all these sites from the program, some leave the pages up anyway.

Even coupons.com has a page for my business with several "Click to Save" buttons that do nothing. They're publicly traded as well.

Some of the sneakier coupon sites will put up other, competing products that do have affiliate programs to try and flip people into a product where they get paid.

It blows my mind how many companies still eagerly work with coupon sites given this has been true for over a decade.

The scam back in the day* was that they would bid on their retailer's own keywords. Their ads would send that traffic through their own affiliate links and get paid on any revenue generated. The ads looked legit and appeared to point to the retailers so most folks never even knew. So they cannibalized their retailer's own paid traffic and made it more expensive to bid on their own keywords.

*Back in the day was nearly ten years ago. Things may have changed.

I see other folks have already explained what I would call the "pop-under" approach where a new window is opened from RMN's site to the retailer in question. This is nefarious but in a slightly different way than the above.

Most affilite programs forbid this, but you can find that some clueless program runners allow it... usually because of site owners who are too cheap and clueless to bid on their own keywords anyway.

They don't actually refer anyone (usually you don't look for coupons before you're at the checkout window), but in order to view a coupon you need to click a link that gives you the RetailMeNot referrer cookie, giving RetailMeNot a cut for doing basically nothing.

Especially when, more often than not, the coupon code was invalid.

> RetailMeNot started out as WhaleShark Media and changed its name in 2013 after acquiring RetailMeNot.com, an Australian-based coupon site founded in 2006.

huh so thats what happened

It actually started as RetailMeNot, a website run by two Australians. Whale shark media bought it, and then renamed their company to RetailMeNot. The website has always been RetailMeNot.com.

It started out as bugmenot, for sharing logins to web sites to deal with mandatory signups.

Yep. This is actually the secret to their (initial) SEO success.

That's really interesting. Can you elaborate?

ya know, thats exactly how I read the statement I quoted........

Huh, totally forgot about that! This was at least partially due to the fact that "WhaleShark Media" had become synonymous with large-scale fraud in some affiliate programs around this time.

RetailMeNot is a weird name isn't it? "don't sell stuff (to me)" for a site for selling stuff (to me)!?

RetailMeNot means don't charge me retail price and rather give me the discounted price by use of coupons found on the RetailMeNot website. It was a wordplay of BugMeNot.

If you read it as "don't sell me stuff at retail price" then it makes more sense.

They started as such the un-mainstream group, trying to aggregate coupon codes so you could get fair prices without getting hammered with marketing. My, how things have changed. Kudos to them for the payout, but sigh.

Unbelievable

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