Comment by coenhyde | Hacker News Reader

Comment by coenhyde | Hacker News Reader

The viable business model for Groupon is to shed 90% of it's 7500 employees, improve business satisfaction and let the businesses come to them. This may be hard now that Groupon has such a bad reputation amongst businesses.

Groupon was too enthusiastic to become big rather than good. I understand why they thought it was necessary and to some degree I agree that it was the correct game to play but I think they have destroyed their chance of retaining the customers (businesses) they acquired during their growth.

Seriously they need to downsize quickly and fix their customer satisfaction (taking a smaller cut would be a start). It would be rough but at least they might turn a business loosing a $100 or so million every quater into a profitable business.

I have a feeling though what's in the hearts of Groupon's leadership is not the desire for a profitable business but a pump and dump.

let the businesses come to them

That will never happen. That's the fundamental problem with "local". Small businesses and mom-and-pop shops need to be called and convinced. They need their hand held. They aren't studying lean marketing practices or split testing their offers.

Look at the head counts for ad sales vs editorial for any local publication (newspaper, magazine, newsletter). If you want to sell to local businesses, you have to call them.

this is dead-on... local = massive sales expense.

elon musk tried to create one such company, Zip2, back in the late 90's. cost of sales ate it alive.

reachlocal, profitfuel, etc has been successful by making their companies into freakish sales-driven machines. the core competence of any "local" is maximaizing sales effectiveness.

I don't bite. Sure it's difficult, but if Groupon was a good experience for the business then it would sell its self. Groupon wouldn't be the $6 Billion monster it is today but at least they might be making some money.

Absolutely true. Reminds me of the yellow pages sales team. They had to show up to get the ad and coax it out of people who had success. Also, a small business advertising publication that I was affiliated with had the same issue. You couldn't run it remotely from another city. You had to be on the street collecting the ad copy from the pizza shop. And you were lucky if the owner was there for the "appointment" as well.

This is exactly the approach Google and Facebook are taking. Let time tell who is the winner

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