71–80 of 134 posts
Anyone else getting tired of these? Why are these companies not being held responsible for their own negligence? If you do not do the math and cannot afford to lose the money then how dare you agree to the terms. This is not on Groupon or any other Daily Deal service. It solely relies on the Small Business owner that does not do his due diligence. This model is no different than bulk purchasing from a supplier. Howev…
Earlier quoted context omitted.
> Lots of businesses have excess capacity that costs them nothing to utilize. I dispute this assertion or, in the very least, see this as being far more complex than you suggest, for two reasons: 1. Customers who might otherwise pay full price will end up using these deals, which is a direct loss to the business; and 2. The inventory may be used up by such offers to such an extent that customers who might otherwise p…
3. Most of the people redeeming Groupons will come at peak hours, so you still have excess capacity at slow hours. If Groupon Now (or something similar) catches on, that might solve the problem of excess capacity, but Groupon Classic does not.
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You left out "generate massive sums of actual revenue from real, paying customers, and become the fastest growing company by revenue in history." I think a bunch of armchair analysts on this thread are going overboard with their predictions of imminent failure.
Ah, revenue. Yes, I remember this from last time round; revenue is what matters, regardless of the costs involved in producing that revenue, or its uncertain future footing. Right.
And many of the startups then that DID post revenue were involved in quasi-illegal quid pro quo scams where Startup A invests in Startup B with the understanding that B will use that newfound capital to purchase from A.
It's almost absurd how closely Groupon is following the classic 'tech bubble' road to disaster. 1. Hype (check) 2. IPO talk (check) 3. Turn down acquisition at incredibly high P/E (check) 4. Superbowl Advert (check) 5. IPO just in time to avoid running out of money (on the way) 6. Market goes rational (inevitable, forces pushing it irrational can't do so forever), valuation plumets 7. Unable to raise money by selling…
I'd agree exceot for #8, everyone is actually talking about it for once and generally in agreement. It is sort of surreal.
The facts of the housing bubble were widely argued during the bubble itself, and yet after the crash, somehow, 'no one saw it coming'.
It's almost absurd how closely Groupon is following the classic 'tech bubble' road to disaster. 1. Hype (check) 2. IPO talk (check) 3. Turn down acquisition at incredibly high P/E (check) 4. Superbowl Advert (check) 5. IPO just in time to avoid running out of money (on the way) 6. Market goes rational (inevitable, forces pushing it irrational can't do so forever), valuation plumets 7. Unable to raise money by selling…
6. Market goes rational (inevitable, forces pushing it irrational can't do so forever), valuation plumets [sic] It's a nitpick, but the only irrationality that gets checked is unsustainable irrationality. It's a bit of a simplification to say that profits are actually "equilibrium irrationality," but not by much. If the market were actually composed of rational agents, all prices would be driven down to material cost…
However, it's not efficient, since there is a lot you can do to make a better guess than assuming it is a completely random process.
While this will make it more efficient, there are plenty of people making random guesses, which reduces the effect your better guesses have on the overall efficiency of the market.
There are also plenty of fools, and they are investing on all sorts of techniques which ignore any of the global considerations, and of course this is how bubbles expand.
It's almost absurd how closely Groupon is following the classic 'tech bubble' road to disaster. 1. Hype (check) 2. IPO talk (check) 3. Turn down acquisition at incredibly high P/E (check) 4. Superbowl Advert (check) 5. IPO just in time to avoid running out of money (on the way) 6. Market goes rational (inevitable, forces pushing it irrational can't do so forever), valuation plumets 7. Unable to raise money by selling…
You left out "generate massive sums of actual revenue from real, paying customers, and become the fastest growing company by revenue in history." I think a bunch of armchair analysts on this thread are going overboard with their predictions of imminent failure.
If I raised a few hundred million dollars, I could create a website where you went, and gave your credit card number. I would charge your card $1.00 and then credit your card $1.40. I would be Groupon, except I would be slightly more profitable.
Earlier quoted context omitted.
You left out "generate massive sums of actual revenue from real, paying customers, and become the fastest growing company by revenue in history." I think a bunch of armchair analysts on this thread are going overboard with their predictions of imminent failure.
Groupon spends $1.43 for every $1 in revenue. Hell they could just not do any business and increase their revenue 43% overnight...
Earlier quoted context omitted.
Groupon spends $1.43 for every $1 in revenue. Hell they could just not do any business and increase their revenue 43% overnight...
Does that spending include their dividends or other cash outflows to the founders? Because if it is straight spending money they are in trouble.
Earlier quoted context omitted.
You left out "generate massive sums of actual revenue from real, paying customers, and become the fastest growing company by revenue in history." I think a bunch of armchair analysts on this thread are going overboard with their predictions of imminent failure.
Ah, revenue. Yes, I remember this from last time round; revenue is what matters, regardless of the costs involved in producing that revenue, or its uncertain future footing. Right.
"To demonstrate the economics of our business model, we have compared the revenue and gross profit generated from the North American subscribers we acquired in the second quarter of 2010, which we refer to as our Q2 2010 cohort, to the online marketing expenses incurred to acquire such subscribers. The Q2 2010 cohort is illustrative of trends we have seen among our North American subscriber base. The Q2 2010 cohort included 3.7 million subscribers that we initially spent $18.0 million in online marketing to acquire in the second quarter of 2010. In that quarter, we generated $29.8 million in revenue and $12.8 million in gross profit from the sale of approximately 1.2 million Groupons to these subscribers. Through March 31, 2011, we generated an aggregate of $145.3 million in revenue and $61.7 million in gross profit from the sale of approximately 6.3 million Groupons to the Q2 2010 cohort. In summary, we spent $18.0 million in online marketing expense to acquire subscribers in the Q2 2010 cohort and generated $61.7 million in gross profit from this group of subscribers over four quarters."
They are seeing >3x profit on typical cohorts, so they decided to buy as many users as possible (which is smart).