Groupon has no viable business model

Post by [deleted] » Wed, Aug 17, 2011, 10:21 PM UTC

Post by dave_sullivan » Wed, Aug 17, 2011, 10:25 PM UTC

coffeemug wrote: post #57

It's almost as if people derive personal satisfaction from poking holes in Groupon's success (or any startup, for that matter). Groupon has no viable business model, people will get tired of Zynga's games, Twitter can't monetize, Facebook will be killed by Google+/is useless/the ads on it aren't worth anything, etc. Every time one of these things gets pointed out, people show up and start high-fiving each other, say…

Post by phereford » Wed, Aug 17, 2011, 10:47 PM UTC

pbreit wrote: post #61

phereford wrote: post #15

Earlier quoted context omitted.

Disclaimer: I work for a sustainable deal site for local businesses. One factor that hbr is not mentioning is business owners (national and local) that participate on Groupon, for the most part, are having bad experiences. Obviously this depends on the industry (sky dive plus all around, coffee shops down all around) but not all industries can live off of 25% of their goods sold. I know many local business owners who…

> business owners (national and local) that participate on Groupon, for the most part, are having bad experiences My understanding is that Groupon's satisfaction rate is well above 50%. It seems that everyone forgets that, at worst, this is an advertising expense that guarantees revenue and foot traffic.

Post by tptacek » Thu, Aug 18, 2011, 12:01 AM UTC

jellicle wrote: post #73

tptacek wrote: post #47

Earlier quoted context omitted.

It is simply not true that a "great deal" will get publicized by itself, or that any pre-2009 channel for publicizing great deals was effective for most businesses. I find this comment facile. Small businesses die all the time because nobody discovers them. I don't know about Groupon, but it's flat out wrong to say that small businesses don't have the problem Groupon claims be addressing. They clearly do have the pro…

> It is simply not true that a "great deal" will get publicized by itself I said spend five minutes emailing. If I'm selling widgets for $25 when the usual, accepted price in commerce is $100 (which is the standard Groupon deal, right?) and I spend five minutes emailing the widget fanatics mailing list, I guarantee that a LOT of people will discover my offer to sell widgets for $25. The deal will spread all by itself…

Post by coenhyde » Thu, Aug 18, 2011, 12:14 AM UTC

OpenAmazing wrote: post #50

coenhyde wrote: post #36

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 de…

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 bus…