BuyWithMe Lays off More Than Half of its Employees • Hacker News Board

Re: BuyWithMe Lays off More Than Half of its Employees

#21

Post by TheDroids » Thu, Oct 20, 2011, 7:53 AM UTC

jprobert wrote: post #17

abbasmehdi wrote: post #12

I don't get why startups go into acquisition binges, trying to buy their way to the top rather than out-innovating the competition. It is really sad for the poor folks laid off, and this seems like it was run purely on greed rather than any kind of desire to do something awesome. (Sorry, do I sound like a hippie?).

It's the Eric Lefkowsky model.. Grow as fast as possible at an unsustainable rate in an unproven market and take be money and run.

Ain't that the truth. The man is a swindler at best.

Re: BuyWithMe Lays off More Than Half of its Employees

#22

Post by mathattack » Thu, Oct 20, 2011, 10:31 AM UTC

jprobert wrote: post #16

bproper wrote: post #4

The reckoning is clearly coming on this industry (daily deals / group buying). Just look at Groupon cutting their IPO in half today. But the way this happened is really terrible. They laid of tons of people with no warning and no severance. They did not have to try and raise more money at a ridiculous valuation. They could have taken a flat to down round, stopped buying other little companies, and tried to make it wo…

Groupon cut their IPO by more than half to $10-11b from $25-30b. If you think its bad that they laid off 75% of their employees wait until Groupon has to lay off a good portion of their 10k +- sales force. Through being in the business, understanding Groupons financials and the market I have a hard time believing they are worth more than a few billion. The market requires a large on the ground sales force (expensive)…

Groupon even alluded to the layoffs when the CEO talked about marketing costs dramatically decreasing.

Re: BuyWithMe Lays off More Than Half of its Employees

#23

Post by dangrossman » Thu, Oct 20, 2011, 11:09 AM UTC

william42 wrote: post #19

jpdoctor wrote: post #8

Earlier quoted context omitted.

> The reckoning is clearly coming on this industry (daily deals / group buying). With more folks predicting recession (eg http://www.channelregister.co.uk/2011/10/18/gartner_recessio... ), I doubt it will be just this industry.

I thought we were still in a recession.

The U.S. recession that began in December 2007 ended in June 2009, officially.

Re: BuyWithMe Lays off More Than Half of its Employees

#24

Post by 0x12 » Thu, Oct 20, 2011, 11:31 AM UTC

jprobert wrote: post #16

bproper wrote: post #4

The reckoning is clearly coming on this industry (daily deals / group buying). Just look at Groupon cutting their IPO in half today. But the way this happened is really terrible. They laid of tons of people with no warning and no severance. They did not have to try and raise more money at a ridiculous valuation. They could have taken a flat to down round, stopped buying other little companies, and tried to make it wo…

Groupon cut their IPO by more than half to $10-11b from $25-30b. If you think its bad that they laid off 75% of their employees wait until Groupon has to lay off a good portion of their 10k +- sales force. Through being in the business, understanding Groupons financials and the market I have a hard time believing they are worth more than a few billion. The market requires a large on the ground sales force (expensive)…

A Groupon IPO is one of the worst things that could happen to the industry, at any price.

It's reminiscent of the .com crash and it gives me serious doubts about the rationality of the current tech market.

Let's sell stuff at a discount so large that the merchants lose money but we make money is not a sustainable business model, it's a predatory strategy. How on earth could you offer stock in a venture like that to the public with a clean conscience?

Sooner or later you run out of merchants, it only works for goods that have such a huge profit margin that you can actually afford that. And I rarely see Groupon deals that suggest that they're still profitable for the merchants. Why merchants do Groupon deals is a mystery to me, maybe someone that has done a Groupon deal as a merchant can shed some light on the economic returns for them.

Maybe they're out-of-band in recurring visitors or something like that but I simply don't get it. Or maybe there is something crucial about how Groupon operates that I'm missing, in that case enlighten me please.