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My read on this, especially given the extreme flexibility series G investors showed in cashing out founders, is that when Groupon is up and running in a locale,

My read on this, especially given the extreme flexibility series G investors showed in cashing out founders, is that when Groupon is up and running in a locale, it makes a whole shitload of money. I also would anticipate from reading the expansion numbers and having a little bit of business experience myself that Groupon grew literally as fast as it possibly could in the last few years; there was no way for them to successfully move any faster, no matter how much cash they were given. I'm guessing you'll see some gyrations as they continue to try and solidify their global lead, then slow move to profitability, then one day, (if margins hold up) BAM. Major Net Income. Right now the market clearly is going to reward a company who can get this done successfully in as broad a portion of the world as possible; if they can demonstrate that existing locales are profitable after a certain period of time, they will have happy shareholders as well. It's a landgrab, and Amazon is a good comparison.

freshfunk 15y ago
Perhaps the other useful part of the Amazon analogy is that I believe that GroupOn will slowly be eaten alive by competitors unless they bring some real business and/or tech innovation. Last I saw, LivingSocial's trajectory was steeper than GroupOns. I think we can expect LivingSocial to go public soon so they can add some cash to their war chest.
- vessenes 15y ago
  This would be great. I'd gladly be in a situation where I could split investment dollars between two large growing competitors in a market situation like this.
hyperbovine 15y ago
> it makes a whole shitload of money. Sounds like they /gross/ a shitload; but they need 7,000 salaried employees to do it, and they're not even in that many places yet. Groupon is a brilliant idea, but it's not the typical zero-overhead startup that HN people are often involved in. Just because you are bringing $20 billion in the door every year doesn't mean you are making f.u. money. I'm not knocking it as in investment -- I really have no expertise in that area -- but the numbers appear less eye-popping when you look at it as sales/marketing outfit that happens to do all of its business online.

freshfunk 15y ago

Perhaps the other useful part of the Amazon analogy is that I believe that GroupOn will slowly be eaten alive by competitors unless they bring some real business and/or tech innovation. Last I saw, LivingSocial's trajectory was steeper than GroupOns. I think we can expect LivingSocial to go public soon so they can add some cash to their war chest.

vessenes 15y ago
This would be great. I'd gladly be in a situation where I could split investment dollars between two large growing competitors in a market situation like this.

hyperbovine 15y ago

> it makes a whole shitload of money. Sounds like they /gross/ a shitload; but they need 7,000 salaried employees to do it, and they're not even in that many places yet. Groupon is a brilliant idea, but it's not the typical zero-overhead startup that HN people are often involved in. Just because you are bringing $20 billion in the door every year doesn't mean you are making f.u. money. I'm not knocking it as in investment -- I really have no expertise in that area -- but the numbers appear less eye-popping when you look at it as sales/marketing outfit that happens to do all of its business online.