4 ms·
Groupon - Cool Business Model
- thunk 17y agoThe central concept here -- a transaction triggers when a threshold of participants is met -- is bigger than group coupons. It's a sort of "Group Transactional Economics" by analogy to the atomicity of db or stm transactions. I think it could eliminate a lot of the risk and inefficiency dealt with by independent makers of all stripes.
- brm 17y agoThe central concept is incredible but the way groupon uses it is not, the spa did not book over $4300 in business like Chris says, rumor has it that groupon actually takes 50% of the sales for itself. Sure, Groupon is a good business but its borderline abusive to its partner businesses (something that would not work if applied to independent makers).
- thunk 17y agoWell, Groupon is the least interesting manifestation of the idea. I'm interested in two other takes on the idea: group purchasing collectives on the consumer side, and limited editions on the maker side.
- req2 17y agoCould you elaborate on your claim of abusiveness? I'm not sure such an unsourced rumor is sufficient evidence, nor am I aware of Groupon having such Walmartian clout that it can bully vendors into deals. Surely the spa signed its own end of the contract?
- deleted 17y ago[deleted]
- gojomo 17y agoSee also 'assurance contracts' and 'dominant assurance contracts': http://www.marginalrevolution.com/marginalrevolution/2005/05/assurance_contr.html http://www.marginalrevolution.com/marginalrevolution/2005/05... http://en.wikipedia.org/wiki/Assurance_contract http://en.wikipedia.org/wiki/Assurance_contract A system that was (theoretically) better at funding public goods than taxation would compete in some rather large markets.
- dabeeeenster 17y agoThis is 10 years old! Letsbuyit ran this model in the dot-com hysteria but obviously blew up before they could prove it would make money (no doubt they got someone like Oliver Stone to direct their TV ads or something).
- thomasfl 17y agoIf auctions is the core of the new economy, then there's plenty of business opportunities left.
- dlevine 17y agoI think that the "threshold" is really a red herring. Having followed the site for a few weeks at this point, I would suspect that pretty much every deal "tips". The actual effects of having a threshold are twofold: 1) First of all, it encourages people to tell their friends to participate 2) It creates the illusion of a group discount where none exists. A big discount might tarnish a business' reputation, but if there is a "group discount," people understand. When you think about it, there is actually no economy of scale about a business offering several hundred coupons valid for a six-month window. It's brilliant marketing, though.
- robotrout 17y agoI agree, it's a marketing stunt. There are no economies of scale at work here. Now, if I made it for an event, and I only booked the event venue and hired the entertainment / wait staff if the threshold tickets were purchased, than there's genuine utility here. But for miscellaneous products/services that I offer daily anyway, this is just a marketing stunt.
- brandnewlow 17y agoYou just solved my startup's problem of not having an interesting (i.e. not "drinks at a bar") way to organize our meetups. Thank you, kind sir.
- crux_ 17y agoI worked at a consulting firm on a flameout .com (actbig) business that had a nearly identical model back in the late 90s; the big difference here seems to be the (smart!) focus on local businesses & services rather than generic goods like electronics and furniture, and offering only one deal at per day (rather wootlike). Last time this happened: http://news.ycombinator.com/item?id=692644 http://news.ycombinator.com/item?id=692644 I think the answer to the the question I asked then might be "yes." :) (They still have a ways to go for profitability, though... 40 people on staff while the items are usually under $100 and have less than 1000 purchasers. Still, they've made it much further than my old client did.)