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Daily Deals are not dead. The model is promising for a variety of businesses and Groupon has it well executed. It also has significant barriers to entry if you

Daily Deals are not dead. The model is promising for a variety of businesses and Groupon has it well executed. It also has significant barriers to entry if you don't have a size advantage or experience with cold sales. Groupon's stock might be in the gutter but the company is for here to stay and for a long time. It's possible that there will be a couple of (well financed) competitors continuing to fight for first place, but most of the wannabes have already disappeared. In addition to the deal hunters that are in their customer base, there are many addicted to this type of purchases. I have quite a lot of anectodal evidence for such behavior, and if you ask around, you'll find many more.

dsl 14y ago
> The model is promising for a variety of businesses and Groupon has it well executed. Groupon essentially invented payday loans for businesses. The two largest payday loan companies in the US at one point had valuations near Groupons too, until the slow moving legal system eventually caught up to them. Deal hunters will go anywhere there is a deal. Groupon just moved "going out of business" and "lost our warehouse, all inventory must go!" sales to the internet.
- klous 14y ago
  Groupon didn't invent payday loans. "Merchant Cash Advance" loans have existed for many years where merchants who process credit cards can sell a portion of their future credit receipts for immediate cash and the industry has grown substantially year over year. The industry kind of has a scummy tinge to it, but these are merchants who cannot get capital from traditional sources and want to upgrade their retail location or buy some equipment. (or go on a vacation, the funders truthfully don't really care how they use the money)
suresk 14y ago
While I agree that the concept of Daily Deals and Groupon as an implementation of that concept are not dead, I still think Groupon is going to struggle. 1) The model is promising for some businesses, but a lot of them end up being one-time customers because the results are so poor. The most sustainable customers are those with high margins and high sales costs - a big market, to be sure, but enough to justify a multi-billion dollar company? I'm not sure. 2) I would be more worried about competition at the local level, which has smaller barriers to entry. Lots of companies (newspapers, tv stations, etc) have existing sales infrastructure for a region and can compete aggressively with Groupon. Add to that a handful of well-funded, competent competitors, and it is easy to see how Groupon's margins could continue to be squeezed. Is Groupon going to be around for a long time? Probably, but I doubt it will be as a multi-billion dollar company with good growth prospects.

dsl 14y ago

> The model is promising for a variety of businesses and Groupon has it well executed. Groupon essentially invented payday loans for businesses. The two largest payday loan companies in the US at one point had valuations near Groupons too, until the slow moving legal system eventually caught up to them. Deal hunters will go anywhere there is a deal. Groupon just moved "going out of business" and "lost our warehouse, all inventory must go!" sales to the internet.

klous 14y ago
Groupon didn't invent payday loans. "Merchant Cash Advance" loans have existed for many years where merchants who process credit cards can sell a portion of their future credit receipts for immediate cash and the industry has grown substantially year over year. The industry kind of has a scummy tinge to it, but these are merchants who cannot get capital from traditional sources and want to upgrade their retail location or buy some equipment. (or go on a vacation, the funders truthfully don't really care how they use the money)

suresk 14y ago

While I agree that the concept of Daily Deals and Groupon as an implementation of that concept are not dead, I still think Groupon is going to struggle. 1) The model is promising for some businesses, but a lot of them end up being one-time customers because the results are so poor. The most sustainable customers are those with high margins and high sales costs - a big market, to be sure, but enough to justify a multi-billion dollar company? I'm not sure. 2) I would be more worried about competition at the local level, which has smaller barriers to entry. Lots of companies (newspapers, tv stations, etc) have existing sales infrastructure for a region and can compete aggressively with Groupon. Add to that a handful of well-funded, competent competitors, and it is easy to see how Groupon's margins could continue to be squeezed. Is Groupon going to be around for a long time? Probably, but I doubt it will be as a multi-billion dollar company with good growth prospects.