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The reckoning is clearly coming on this industry (daily deals / group buying). Just look at Groupon cutting their IPO in half today. But the way this happened

by bproper 15y ago

The reckoning is clearly coming on this industry (daily deals / group buying). Just look at Groupon cutting their IPO in half today. But the way this happened is really terrible. They laid of tons of people with no warning and no severance. They did not have to try and raise more money at a ridiculous valuation. They could have taken a flat to down round, stopped buying other little companies, and tried to make it work.

jpdoctor 15y ago
> The reckoning is clearly coming on this industry (daily deals / group buying). With more folks predicting recession (eg http://www.channelregister.co.uk/2011/10/18/gartner_recession/ http://www.channelregister.co.uk/2011/10/18/gartner_recessio...), I doubt it will be just this industry.
- william42 15y ago
  I thought we were still in a recession.
  - wlievens 15y ago
    A recession has a well-known definition.
  - dangrossman 15y ago
    The U.S. recession that began in December 2007 ended in June 2009, officially.
jprobert 15y ago
Groupon cut their IPO by more than half to $10-11b from $25-30b. If you think its bad that they laid off 75% of their employees wait until Groupon has to lay off a good portion of their 10k +- sales force. Through being in the business, understanding Groupons financials and the market I have a hard time believing they are worth more than a few billion. The market requires a large on the ground sales force (expensive) and huge marketing expenditures to keep and gain new customers who are not loyal. Groupon may be better off pivoting into some sort of social network as they do have >100mm subs. What about Living Social? Their recent valuation was in the billions but not hearing much about them.
- mathattack 15y ago
  Groupon even alluded to the layoffs when the CEO talked about marketing costs dramatically decreasing.
- 0x12 15y ago
  A Groupon IPO is one of the worst things that could happen to the industry, at any price. It's reminiscent of the .com crash and it gives me serious doubts about the rationality of the current tech market. Let's sell stuff at a discount so large that the merchants lose money but we make money is not a sustainable business model, it's a predatory strategy. How on earth could you offer stock in a venture like that to the public with a clean conscience? Sooner or later you run out of merchants, it only works for goods that have such a huge profit margin that you can actually afford that. And I rarely see Groupon deals that suggest that they're still profitable for the merchants. Why merchants do Groupon deals is a mystery to me, maybe someone that has done a Groupon deal as a merchant can shed some light on the economic returns for them. Maybe they're out-of-band in recurring visitors or something like that but I simply don't get it. Or maybe there is something crucial about how Groupon operates that I'm missing, in that case enlighten me please.

by bproper 15y ago

jpdoctor 15y ago

> The reckoning is clearly coming on this industry (daily deals / group buying). With more folks predicting recession (eg http://www.channelregister.co.uk/2011/10/18/gartner_recession/ http://www.channelregister.co.uk/2011/10/18/gartner_recessio...), I doubt it will be just this industry.

william42 15y ago
I thought we were still in a recession.
- wlievens 15y ago
  A recession has a well-known definition.
- dangrossman 15y ago
  The U.S. recession that began in December 2007 ended in June 2009, officially.

jprobert 15y ago

Groupon cut their IPO by more than half to $10-11b from $25-30b. If you think its bad that they laid off 75% of their employees wait until Groupon has to lay off a good portion of their 10k +- sales force. Through being in the business, understanding Groupons financials and the market I have a hard time believing they are worth more than a few billion. The market requires a large on the ground sales force (expensive) and huge marketing expenditures to keep and gain new customers who are not loyal. Groupon may be better off pivoting into some sort of social network as they do have >100mm subs. What about Living Social? Their recent valuation was in the billions but not hearing much about them.

mathattack 15y ago
Groupon even alluded to the layoffs when the CEO talked about marketing costs dramatically decreasing.
0x12 15y ago
A Groupon IPO is one of the worst things that could happen to the industry, at any price. It's reminiscent of the .com crash and it gives me serious doubts about the rationality of the current tech market. Let's sell stuff at a discount so large that the merchants lose money but we make money is not a sustainable business model, it's a predatory strategy. How on earth could you offer stock in a venture like that to the public with a clean conscience? Sooner or later you run out of merchants, it only works for goods that have such a huge profit margin that you can actually afford that. And I rarely see Groupon deals that suggest that they're still profitable for the merchants. Why merchants do Groupon deals is a mystery to me, maybe someone that has done a Groupon deal as a merchant can shed some light on the economic returns for them. Maybe they're out-of-band in recurring visitors or something like that but I simply don't get it. Or maybe there is something crucial about how Groupon operates that I'm missing, in that case enlighten me please.