> Promotional coupons are not exactly a new idea.The new idea was using the Internet to build a gigantic new audience for those coupons. Once you have that audience, you then become more attractive to businesses that want to advertise to it. In other words, Groupon was just a 21st century version of the age old "pennysaver" (https://en.wikipedia.org/wiki/Pennysaver) publications you can pick up in places like coffee shops, or that you get periodically in the mail (ugh).
An electronic pennysaver could possibly have worked, if they'd grown organically and kept the operation lean. But instead they went the other way, figuring if they got big enough fast enough they could then use the size of their audience to muscle the advertisers who wanted to reach that audience into swallowing hugely disadvantageous terms in exchange for access. (See http://www.slate.com/articles/technology/technology/2012/08/...) for details on that.)
It worked for a while, when their rapid growth made them look like an unstoppable juggernaut that any small business was going to have to learn to live with. But then the growth stopped and smart advertisers fled as they realized that the terms made dealing with Groupon more trouble than it was worth, which meant the one choice Groupon had left to justify its valuation was to get into bed with scuzzy advertisers looking to rip off that big audience. But then the audience eventually realized it was getting ripped off, and boom, death spiral.