5 ms·

I am not at all a Groupon apologist (I think their base business is declining and doesn't make sense for most local businesses in the long-term), but you have g

by pitdesi 15y ago

I am not at all a Groupon apologist (I think their base business is declining and doesn't make sense for most local businesses in the long-term), but you have gone way overboard by comparing Groupon to boo, webvan, and kozmo. For all its faults, Groupon is on track for $1.5Bn in NET revenues (this doesn't include pass-through that they initially included in revenues) this year, and will probably still IPO somewhere around 10 billion dollars. All of the companies you mentioned only existed for 2 years before being liquidated. As for everyone in the valley knowing Groupon was a ponzi scheme for the past year and a half - then the folks from Battery, Accel, Kleiner Perkins, Greylock, NEA, TCV, Silver Lake, etc (all of whom made investments in Groupon this year) would have to be complete idiots to invest in Groupon, and that is certainly not true. Sidenote- a quick reminder on what it was like in the 00 bubble that you reference: http://feefighters.com/blog/ff_infographic/tech-boom-or-bubble-lets-look-at-the-data/ http://feefighters.com/blog/ff_infographic/tech-boom-or-bubb...

Retric 15y ago
You can call a loan Revenue that does not make it so. And when you need advertizing to sustain your business you don't get to call it revenue neutral, it's still just another expense. June 2nd, 2011 "Groupon lost $456 million last year, and another $147 million last quarter." http://techcrunch.com/2011/06/02/groupon-growth-2-6-billion-revenue-run-rate-charts/ http://techcrunch.com/2011/06/02/groupon-growth-2-6-billion-... PS: The #1 investing rule is the second a company starts playing games with their books avoid them.
- pbreit 15y ago
  Much of business consists of selling product before paying vendors. Have you heard of "Net 30/60/90" terms? The advertising is to acquire customers. But then it can obviously promote deals to existing customers for essentially no cost. This is also the reason it wasn't crazy to consider the mailing list an asset and account for it accordingly. Progress is only made when someone pushes.
  - anigbrowl 15y ago
    What, they are going to lay off their massive sales staff and the vendors are going to keep coming back to offer zero-margin daily deals because...? This company doesn't have a USP; its business model is being cloned left and right, and customers have zero brand loyalty to the coupon broker. I can't understand your unshakeable faith in it. Your pricetack.com project looks vastly more interesting to me than Groupon ever has.
    - goodweeds 15y ago
      Even then, Groupon was basically a modified rip-off of Woot.com and other deals sites. Bernie Madoff would be proud of Groupon.
byoung2 15y ago
but you have gone way overboard by comparing Groupon to boo, webvan, and kozmo. At least those companies had tangible assets to liquidate (boo had inventory, webvan had a distribution network, and Kozmo had a stash of DVD's). Groupon has posted impressive revenue numbers (but still no profit) using an unsustainable model of aggressive spending on advertising and sales team headcount. With growth slowing, increasing backlash from merchants, and questions about their accounting methods, Groupon is on the decline. Maybe TheGlobe.com (http://en.wikipedia.org/wiki/TheGlobe.com http://en.wikipedia.org/wiki/TheGlobe.com) is a more fitting comparison.
jacques_chester 15y ago
> then the folks from Battery, Accel, Kleiner Perkins, Greylock, NEA, TCV, Silver Lake 1. These reputable VC firms have invested in stupid ideas before. 2. Ever heard of the "Greater Fool Theory"?

by pitdesi 15y ago

Retric 15y ago

You can call a loan Revenue that does not make it so. And when you need advertizing to sustain your business you don't get to call it revenue neutral, it's still just another expense. June 2nd, 2011 "Groupon lost $456 million last year, and another $147 million last quarter." http://techcrunch.com/2011/06/02/groupon-growth-2-6-billion-revenue-run-rate-charts/ http://techcrunch.com/2011/06/02/groupon-growth-2-6-billion-... PS: The #1 investing rule is the second a company starts playing games with their books avoid them.

pbreit 15y ago
Much of business consists of selling product before paying vendors. Have you heard of "Net 30/60/90" terms? The advertising is to acquire customers. But then it can obviously promote deals to existing customers for essentially no cost. This is also the reason it wasn't crazy to consider the mailing list an asset and account for it accordingly. Progress is only made when someone pushes.
- anigbrowl 15y ago
  What, they are going to lay off their massive sales staff and the vendors are going to keep coming back to offer zero-margin daily deals because...? This company doesn't have a USP; its business model is being cloned left and right, and customers have zero brand loyalty to the coupon broker. I can't understand your unshakeable faith in it. Your pricetack.com project looks vastly more interesting to me than Groupon ever has.
  - goodweeds 15y ago
    Even then, Groupon was basically a modified rip-off of Woot.com and other deals sites. Bernie Madoff would be proud of Groupon.

byoung2 15y ago

but you have gone way overboard by comparing Groupon to boo, webvan, and kozmo. At least those companies had tangible assets to liquidate (boo had inventory, webvan had a distribution network, and Kozmo had a stash of DVD's). Groupon has posted impressive revenue numbers (but still no profit) using an unsustainable model of aggressive spending on advertising and sales team headcount. With growth slowing, increasing backlash from merchants, and questions about their accounting methods, Groupon is on the decline. Maybe TheGlobe.com (http://en.wikipedia.org/wiki/TheGlobe.com http://en.wikipedia.org/wiki/TheGlobe.com) is a more fitting comparison.

jacques_chester 15y ago

> then the folks from Battery, Accel, Kleiner Perkins, Greylock, NEA, TCV, Silver Lake 1. These reputable VC firms have invested in stupid ideas before. 2. Ever heard of the "Greater Fool Theory"?