Have there been that many stories? I've heard a couple from small time coffee shops that may not be the best financial planners, but those few sad stories seem to reverberate without a lot of new voices joining the chorus.
We see dozens of articles like this reach the front page predicting Groupon's doom, always citing the same dissatisfied coffee shop, always attacking imaginary business models. I'd like to see someone refute Groupon's value as an advertising tool, or even compare it to existing alternatives.
On top of that, a class of hacker news user exists who spells "Groupon" groupOn. It seemed liken impossibly childish insult, to mangle something's name, so I assumed it was an accident or maybe that's how Groupon used to be spelled when it was a startup. Well I looked it up, and no.
I root for startups that empower people and open up new opportunities, not for ones that have found a loophole in the human psyche and exploit it to the maximum.
I think most urban-ish places with a capitalized youth are a ripe market for coupon-type businesses.
It's also a brilliant business model for a recession and financial crisis. In most instances it's win-win-win:
- Groupon makes money
- people get huge discounts, and save money if it was something they were planing to buy anyway.
- businesses both make money (assuming they worked out the math of the deal correctly before accepting it) and gain huge exposure.
I suppose the only losers are wherever people would have spent that money had they not bought the groupon, but that's hard to quantify (bought the same thing at a higher price? bought something else? saved it?).
I can't think of many more innovative business models for a distressed economy.
That on top of the exploitative nature of many (most?) Groupon users, where they buy a Groupon and never revisit the business after they use their discount.
Groupon is a great business, but some concerns about the quality of the leads arise. We need the Glengarry leads.
See NY Mag's approval matrix: http://nymag.com/arts/all/approvalmatrix/71237/
All I can say is wow, they scaled super fast (scaled real people), and thats not easy
At least that's how I initially felt about Groupon.
At the same time, my attitude seriously limited my business. I'm trying to build a b2b marketplace, and wanted to build my "marketplace of dreams" (if I built it, they will come). I didn't address SEO or getting initial traffic because that was low brow, and would take care of itself if I built a cool enough product.
Boy was I wrong. That was a long (2+ year) lesson to learn.