4 ms·

Ok, so I'll ask the question. If they're making so much money, why do they need to raise a billion dollars? "Because they can" might be the answer..

3pt14159 16y ago
When you're CPA is significantly lower than your NPV you raise a billion and start buying media.
ironchef 16y ago
An old CEO of mine once said: "The worst time to raise money is when you need it. The best is when you don't need it." Funny thing is he's one of the VCs funding groupon...
jws 16y ago
Land rush. There may only be room for one coupon site in the minds of people and if groupon doesn't get to a nation first, they will lose it forever[1]. This will require marketing expenditures. e.g. Facebook lost Russia. [1] in internet time.
- d0mine 16y ago
  According to Alexa there are three social network sites in the top 10 sites in Russia [1]: vkontakte.ru 3 odnoklassniki.ru 8 facebook.com 10 [1]: http://www.alexa.com/topsites/countries/RU http://www.alexa.com/topsites/countries/RU
  - semanticist 16y ago
    Four: livejournal.com is effectively a social network, although it predates Facebook and the like by half a decade or more.
  - varjag 16y ago
    You can write off odnoklassniki at this point: they are plagued by account theft, and are milking users for money in heavy-handed manner. The only people left there are the long tail middle-aged folk. I expect Facebook to eat VK within a couple of years.
  - skbohra123 16y ago
    vkontakte.ru google translate translates this to facebook.
- alex_c 16y ago
  >"Land rush. There may only be room for one coupon site in the minds of people" I agree this is a likely explanation, but is there any evidence this is the case? I can understand that limitation for a social network, and even for a search engine, but not as much for coupons. I don't care if my dead tree coupons come from several sources, would I care about coupons that show up in my email? I can see two areas of competition, anyway - geography and industry. I suspect targeted coupon sites will always have a fighting chance against more generic ones (Groupon is probably trying to be both, of course).
- pchristensen 16y ago
  [Groupon Employee Speaking] Bingo. It's hard to put into words how fast the business is moving. One of the things mentioned in the press release is investing in technology. We have trouble keeping up with the traffic we have, and we're expecting [redacted]00% growth over the next year. We're in the middle of two big projects now: 1) rearchitecting to handle the aforementioned growth 2) hiring 100 developers or more by September. That kind of stuff costs money - #1 involves a couple dozen developers for 3-6 months, and #2 means ~doubling the size of the dev team. (shameless plug: Groupon is an awesome place to be a dev - highly appreciated, crucial to the company, exciting new projects, etc. Email peterc@groupon.com or go to http://groupon.com/jobs http://groupon.com/jobs . Chicago or Palo Alto.)
  - sachinag 16y ago
    I can't speak to everyone there, but Peter is an exceptional engineer. Their head of affiliates is exceptional. Andrew is clearly exceptional. Their copy is exceptional. Go work at Groupon.
    - pchristensen 16y ago
      <blushing/>
  - moe 16y ago
    hiring 100 developers or more by September 11 new devs per month? So no development this year, only training? shameless plug: Groupon is an awesome place to be a dev [...] crucial to the company Honestly, I'd be very wary of this statement in combination with the above.
    - pchristensen 16y ago
      We're not lowering the bar on who we hire. Process + skill = lots gets done. I was up and running my first day and released code my first week. Work and requirements are decomposed and estimated as a team so when it's time to code it flows quickly and everybody is on the same page. The only change to our hiring expectations is to open up to great developers that don't already have Ruby/Rails skills. Aside from that, we are working on the big hiring push as a creative engineering problem. I'm on the team doing the push and we've been given lots of freedom, resources (both time and money), and responsibility. And there are many. Ore initiatives that promise the same opportunity.
jtbigwoo 16y ago
Because they think they've designed a money machine, but it needs priming, maybe? Their business model relies on a ton of sales people. Hiring and training a ton of sales people all over the world is going to cost a ton of money.
klochner 16y ago
Founders and prior investors cashing out some chips.

3pt14159 16y ago

When you're CPA is significantly lower than your NPV you raise a billion and start buying media.

ironchef 16y ago

An old CEO of mine once said: "The worst time to raise money is when you need it. The best is when you don't need it." Funny thing is he's one of the VCs funding groupon...

jws 16y ago

Land rush. There may only be room for one coupon site in the minds of people and if groupon doesn't get to a nation first, they will lose it forever[1]. This will require marketing expenditures. e.g. Facebook lost Russia. [1] in internet time.

d0mine 16y ago
According to Alexa there are three social network sites in the top 10 sites in Russia [1]: vkontakte.ru 3 odnoklassniki.ru 8 facebook.com 10 [1]: http://www.alexa.com/topsites/countries/RU http://www.alexa.com/topsites/countries/RU
- semanticist 16y ago
  Four: livejournal.com is effectively a social network, although it predates Facebook and the like by half a decade or more.
- varjag 16y ago
  You can write off odnoklassniki at this point: they are plagued by account theft, and are milking users for money in heavy-handed manner. The only people left there are the long tail middle-aged folk. I expect Facebook to eat VK within a couple of years.
- skbohra123 16y ago
  vkontakte.ru google translate translates this to facebook.
alex_c 16y ago
>"Land rush. There may only be room for one coupon site in the minds of people" I agree this is a likely explanation, but is there any evidence this is the case? I can understand that limitation for a social network, and even for a search engine, but not as much for coupons. I don't care if my dead tree coupons come from several sources, would I care about coupons that show up in my email? I can see two areas of competition, anyway - geography and industry. I suspect targeted coupon sites will always have a fighting chance against more generic ones (Groupon is probably trying to be both, of course).
pchristensen 16y ago
[Groupon Employee Speaking] Bingo. It's hard to put into words how fast the business is moving. One of the things mentioned in the press release is investing in technology. We have trouble keeping up with the traffic we have, and we're expecting [redacted]00% growth over the next year. We're in the middle of two big projects now: 1) rearchitecting to handle the aforementioned growth 2) hiring 100 developers or more by September. That kind of stuff costs money - #1 involves a couple dozen developers for 3-6 months, and #2 means ~doubling the size of the dev team. (shameless plug: Groupon is an awesome place to be a dev - highly appreciated, crucial to the company, exciting new projects, etc. Email peterc@groupon.com or go to http://groupon.com/jobs http://groupon.com/jobs . Chicago or Palo Alto.)
- sachinag 16y ago
  I can't speak to everyone there, but Peter is an exceptional engineer. Their head of affiliates is exceptional. Andrew is clearly exceptional. Their copy is exceptional. Go work at Groupon.
  - pchristensen 16y ago
    <blushing/>
- moe 16y ago
  hiring 100 developers or more by September 11 new devs per month? So no development this year, only training? shameless plug: Groupon is an awesome place to be a dev [...] crucial to the company Honestly, I'd be very wary of this statement in combination with the above.
  - pchristensen 16y ago
    We're not lowering the bar on who we hire. Process + skill = lots gets done. I was up and running my first day and released code my first week. Work and requirements are decomposed and estimated as a team so when it's time to code it flows quickly and everybody is on the same page. The only change to our hiring expectations is to open up to great developers that don't already have Ruby/Rails skills. Aside from that, we are working on the big hiring push as a creative engineering problem. I'm on the team doing the push and we've been given lots of freedom, resources (both time and money), and responsibility. And there are many. Ore initiatives that promise the same opportunity.

jtbigwoo 16y ago

Because they think they've designed a money machine, but it needs priming, maybe? Their business model relies on a ton of sales people. Hiring and training a ton of sales people all over the world is going to cost a ton of money.

klochner 16y ago

Founders and prior investors cashing out some chips.