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I increasingly suspect that Groupon is the WebVan of the current tech bubble.
Paul Vixie's profile photoZachary Ogren's profile photoBrian Ferguson's profile photoSam Aminisam's profile photo
never would buy any stock in it
I can't stand their business model. I have yet to see anything good come out of small, clueless businesses buying 25 cents for a dollar.
But WebVan was a cool idea...Groupon is basically a scam. :)
Anyone foolish enough to think that Groupon was sustainable doesn't understand small business marketing for shit...
Is it just me or does it seem like Bubble 2.0 IPOs are timed for the peak valuation of the company? Some of the founders and original investors get very rich while average speculators take over a company that will do nothing but lose value after a brief upward surge. It seems congress supports this approach, I think they changed the rules recently to increase the number of allowed investors pre-IPO. Creating a bigger shadow stock market roughly analogous to that Great Recession shadow banking system in other words.
Seems to me that it's rather like the Lottery -- a way to separate the gullible from their cash.
I suspect that people who invested in are looking at people who bought Groupon and saying "That was pretty dumb."
Anyone can do coupon deals online, there is no first-mover advantage or network effect that helps the first or biggest player. I was amazed that anyone thought Groupon would be worth anything.
+Joe Buck actually not everyone can amass a customer base as big as Groupon did, and being first at something people want, and executing it well, can make you a billionaire. Sure, anyone can install a groupon-clone script and buy a $50 template - but not anyone can make a business out of it. It seems that Groupon couldn't either - Groupon's business model is fatally flawed (selling high tech to small businesses and burning all the money on sales force and marketing). Living Social isn't profitable either, nor is any of the 50+ Groupon clones in my country (and when I say "profitable", I mean that their revenue is bigger than the sum of all invested money, and profit after expenses and taxes are deducted from the revenue).
But the problem is that anyone else can enter the field and undercut Groupon, and many did just that. With Facebook, the problem with a new entrant (hello, Google+) is that all your friends are already on Facebook. With Groupon, the new player can offer businesses a better deal, and the new player already has a big online presence, it can quickly build a reputation.
The other problem is that what they offer just isn't all that interesting and it's VERY regional. I was on Groupon for a while but they had very little in my town and most of what they offered me was pedicures and oil changes. I just don't need that many pedicures or oil changes.

Maybe if you live in a region where Groupon offers a wider variety of interesting services (restaurants, etc.) that's great. For me it was mostly services I didn't need or novelty attractions (Zoo tickets, etc) that I'd rarely use.
the question is "will they leave their cup holders in every seat in the stadium" - evidence of their greed, excesses and Silicon Valley thinking, by-way-of-Chicago - will teach us reams of lessons on what NOT to do - when it comes to hyper-local!
I wasn't all that impressed by Groupon to begin with, and saw their IPO success as having a lot more to do with huge amounts of money looking for a promising tech IPO to invest in than any real strength in the underlying business model and fundamentals. The question from the beginning was whether they'd wind up underwater when the dust settled.
I concluded GroupOn was a stock scam when they turned down Google's buyout offer. Like they're going to sustain their business model against competition from Google and Facebook?
The story of Webvan is sad because of the loss of HomeGrocer (the van's with the pretty peach). But then someone in the Puget Sound area brought it back to life I recall (years later). There was a story once, something about all the money Webvan spent to paint over all the pretty peaches with their crappy logo. Then the vans just sat there in a giant lot as the company twisted away. Groupon reminds me more of, sans the puppet!
I could never "find the faith," not because of the model but Groupon's execution. So-called 'irreverent' ad copy, choppy sales training & seemingly poor understanding of small businesses.

There is no "secret sauce" here. The value add is good customer service (both consumer-facing & b2b).

Living Social seems to have figured out the customer service. Even Google Offers w/Google's famous "mob support" model seems to provide fewer gotchas than Groupon.

The more I write about Groupon, the more it reminds me of Yelp...
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