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Most of those people are idiots. Even if you don't take into account everything listed in that post, considering you need enough people to tip a deal for it to
by us 16y ago
Most of those people are idiots. Even if you don't take into account everything listed in that post, considering you need enough people to tip a deal for it to work is hard enough. In the early stages of building a Groupon clone, the toughest challenge is getting enough people on board day 1 to tip a deal. If you don't get enough people and the deal doesn't tip, you already suck. Most people who aren't in the marketing world don't realize how difficult this is and I'm sure this is at the top of the list for many of the 2000+ Groupon clones as to why they fail. The ones that succeed are those lucky enough to get enough users early on to tip onto the next stage. But even then there are more challenges than merely how "simple" an idea Groupon is. And Groupon isn't the only exception. Every startup has a list of challenges people on the outside can only begin to imagine.
- patio11 16y ago"Tipping a deal" is an artificial constraint. The only thing it does in the model is incentivize customers 1 ~ 10 to bring in customers 11 ~ 200+. You can use any manner of means to prevent deals from failing, from shill-tipping to just out-and-out lying about that artificial constraint actually existing. (The ability to guarantee 200+ customers to the merchant is nice, but you can finesse this by good selection of starting deals or subrosa agreements with the merchant where you either deliver 200 customers or the deal is free and you'll compensate them.)
- us 16y agoThat's a lot of cost to eat up.
- knowsnothing613 16y agoerr.. aren't you also proving that Groupon isn't a scaleable business, since it requires an army of salespeople to negotiate deals with retailers, and massage the pricing beforehand. I've read blogs (Techcrunch & the FDA groupon fail) that say groupon ask retailers to raise prices a month before, so when they offer deals, it appears as though you're getting 50% off, but you're really getting 50% of a product/service that has been marked up 30% a month beforehand. Price msassaging requires direct sales contact, and it'd be hard to automate, since you need sales personnel to follow up. I'd like to know how EBITDA profitable Groupon is. None of this revenue b.s. It's a meaningless data point, without the context of EBITDA.
- us 16y agoI agree on the profit and not on the revenue that matters. But that said, we're talking about Groupon clones here. Groupon itself has proven to gain traction and has made the model work. I'm sure they're profitable. They do have an army of salespeople. While I personally hate that portion of their model, I can't argue they're doing well (figuratively speaking).
- roel_v 16y ago"that Groupon isn't a scaleable business, since it requires an army of salespeople to negotiate deals with retailers" Requiring people doesn't make it non-scalable. Doesn't McDonalds scale? If you have a process to acquire, train and retain sales personnel, it can be made to scale. 'Scale' != 'throw more/better hard/software at it'.