Lextech CEO Alex Bratton and Linda Darragh of the Kellogg School of Management joined WBEZ’s Niala Boodho for the Afternoon Shift’s tech segment, Tech Shift, where guests join the host for a discussion bout the week’s tech news. This week in news we saw a lot about growth and expansion, new jobs, and new office space. However, one piece of big news that wasn’t so positive: Groupon’s second quarter earnings report.
What can startups learn from Groupon?
Boodhoo started the conversation by asking what lessons startups can learn Groupon’s growing pains and poor performance.
Darragh affirmed the entrepreneurial reality and the necessity of reinvention. She also addressed the cost involved in customer acquisition, noting that the long term value of Groupon’s customer may be disproportionate to the cost. She said it seems like they’re trying to derive more value from the customers they’re courting than they can get. On a hopeful note, Darragh predicted that Groupon leadership may dig deep, examining their core competencies to see what reinvention is required for recovery from this slump.
Bratton, stated, “They’re gonna have to keep on innovating. That’s really what the key is going to be. They’ve got some great assets. They’ve got a great retailer base. They’ve got a great customer base, but they’ve got to bring new innovations to the market place so that they’re actually driving value. They can’t let themselves get commoditized, and they’re seeing a little bit of that creep in. They’ve got to keep pushing that, or they’re not going to get there.”
The exciting things are happening in B2B
Boodhoo noted that there’s a lot of focus on consumer facing business, but shifted the conversation to business-to-business (B2B) companies.
Darragh, Clinical Professor of Entrepreneural Pracice at Kellogg was excited for the conversation to shift to B2B. “We see a lot of focus on Yelp…Groupon….but the fact of the matter, the things that are really exciting in Chicago right now are the companies that are B2B,” she said.
Understandably as enthusiastic, Bratton developed on that statement, “Valance [Health Technology Company] is a great example of a company applying technology to solve real world problems. We all know that there are challenges in health care….applying and really focusing on a real business problems. There are huge dollars there.” Bratton noted that “The enterprise space is wide open.”
Enterprise apps generate the most money
The conversation closed by touching on what enterprise apps are and what it means to develop apps for business. Boodhoo introduced Lextech as an enterprise app developer, and asked what enterprise apps have in common with consumer facing apps.
It turns out that they have a lot of things in common. Enterprise apps also need to have an easy-to-use interface. They need to look good and be easy to use, but the difference is knowing the backend systems and how the apps tie the legacy systems to mobility. Not only that, Bratton emphasized again that the best enterprise apps can do something simple but powerful like taking terrible user interface and making it look good and increase its usability. However, enterprise apps also solve hard business problems in a way that makes them scalable and an investment that can save a lot of money for a company.
Boodhoo asked Darragh how many students are focussing on B2B and enterprise development at Kellogg. It turns out that not only do they offer coding and developer courses, but their classes have been restructured to emphasize problem discovery, testing, and launch of big picture apps, not just fickle consumer apps. Students are being pushed to find global problems that are really in need of solutions.
Closing out the discussion, Boodhoo asked what excites Alex most right now about enterprise app development? Being an entrepreneur and the chief geek, Bratton ended with a technological hat tip to business strategy and an ode to mobility: “The element that really excites me is that we can solve really interesting business problems with technology, and do things like cut the time it takes to do something by 50%. The internet had a great impact on the world, but mobility is really driving huge change on the way we do our jobs.”
Listen to the full discussion here: